ORAL ANSWERS TO QUESTIONS

ENERGY AND CLIMATE CHANGE

The Secretary of State was asked—

Photovoltaics

Mary Glindon: What recent representations he has received on his decision to reduce the feed-in tariff for solar PV.

Cathy Jamieson: What recent representations he has received on his decision to reduce the feed-in tariff for solar PV.

Fiona O'Donnell: What recent representations he has received on his decision to reduce the feed-in tariff for solar PV.

Christopher Huhne: Ministers and officials meet regularly with a range of stakeholders from the solar photovoltaic industry. Details of meetings between Department of Energy and Climate Change Ministers and external organisations are published quarterly on the DECC website. The recent consultation on feed-in tariffs for solar PV closed on 23 December 2011. More than 2,300 responses were received and are being analysed prior to the publication of a full Government response to the consultation in the coming weeks.

Mary Glindon: The Secretary of State spent more than £66,000 of public money on legal fees, but he is refusing to accept the Appeal Court decision that his plan to cut feed-in tariff subsidy is unlawful. As well as jeopardising the future of the industry by fighting the Court ruling, how much more public money does he intend to waste?

Christopher Huhne: I entirely reject the idea that there is no future for the industry. The reality is that we would be able to support at least twice as many installations at the new tariff rate as we could under the old one.
	The hon. Lady asks about the costs of the legal cases. I merely point out to her that we are spending a few thousand pounds in order to save consumers £1.5 billion, which is what the cost would have been had we left the case to run. The reality is that the previous Labour
	Government introduced a scheme that was fundamentally flawed. As with other issues, this Government are putting Labour’s mess right.

Cathy Jamieson: Is not the truth of the matter that this episode has led to a frenzy of additional applications? There has been a 1,100% increase in the number of people trying to get systems installed in their homes in a short period of time. Businesses in my constituency tell me that that has caused chaos in the supply chain. Those systems also had to be installed at a time of extremely poor weather in Scotland. What does the Minister say in response to those points?

Christopher Huhne: The hon. Lady conveniently omits to mention that the design flaw in the scheme introduced by the Leader of the Opposition ensured that there was absolutely no way of automatically reducing the tariffs in line with what was going on in the real world, despite the fact that other countries—Germany, for example—had introduced such schemes. All we had to do was find out was happening in Germany and model our scheme on theirs. Did the Labour Government bother to learn those lessons? No. The result is that we have to clean up the mess.

Fiona O'Donnell: It is becoming uncomfortable watching the Secretary of State trying to defend the indefensible. On 31 October, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), told the House that the Government wanted to spread solar power as widely as possible. If that is true, why do the Government’s plans exclude almost nine out of 10 households and anyone living in social housing from having solar power?

Christopher Huhne: I entirely disagree with the hon. Lady’s analysis of what was proposed in the consultation paper. Apart from anything else, she completely ignores the possibility of improvement in the energy efficiency of homes. Ensuring energy efficiency is one thing that we are keen to do.
	I simply remind Labour Members that the Leader of the Opposition introduced a scheme at a cost of £7.9 billion. That went directly to consumers, and there was no way whatever of controlling those costs. He so doubted the dynamism of the private sector that he predicted no commercial take-up of solar power in the first three years of the scheme, even while solar costs were tumbling, and he ignored the best practice of the German FITs scheme and failed to include a system of automatic degression. All this Government are doing is clearing up the mess that Labour left behind.

Alan Reid: One unfortunate knock-on effect of the solar dispute is a delay in the review of FITs for small-scale hydro. Many planned schemes on Argyll and Bute cannot go ahead until that uncertainty is resolved, which is causing severe problems for businesses and community groups. Will my right hon. Friend please do all he can to end that uncertainty as soon as possible so that those vital small-scale hydro schemes can go ahead?

Christopher Huhne: I pay tribute to my hon. Friend, who has also raised this issue in correspondence. He is a doughty champion for the interests of those of his constituents who want to go ahead with micro-hydro
	and other schemes. I can reassure him that the Government will not let problems with the solar feed-in tariff get in the way. We want micro-hydro and other schemes to take off and will introduce proposals as soon as possible. I hope to be able to do so in February.

Robert Halfon: The Minister may be aware that there are hundreds of Harlow residents in social housing who were promised solar power panels, but the new rate is too low for the scheme to be viable. Will my right hon. Friend tell the House whether he would consider a more generous community rate for the feed-in tariff, even if it was for only a few months?

Christopher Huhne: The absolute key to what is happening with solar panels is the collapse in the cost. The idea that something might not be attractive commercially today does not mean that it will not be so in pretty short order. What has been happening over the past 18 months is an enormous increase in the production capacity of China. Essentially, what has happened is that the Henry Ford of solar panels—who happens to be Chinese these days—has introduced the Model T, and we are getting an enormous reduction in costs as a result of economies of scale.

Caroline Flint: When the cuts to solar were announced, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker) claimed that they would create jobs. Paragraph 73 of the impact assessment, signed off by the Minister on 2 November 2011, says that
	“there could be around 1,000 to 10,000 gross additional jobs in this sector in the three years to 2014/15”.
	Can the Secretary of State confirm today that those 1,000 to 10,000 jobs are not additional jobs, but the total number that the industry will support, which, for a sector that currently employs nearly 30,000 people, means tens of thousands of job losses?

Christopher Huhne: What is absolutely crucial for the sector is that there should be a sustainable pathway for growth in the future. What the right hon. Lady has completely failed to address is the fact that if we continued to over-subsidise at the previous rate, we would have fewer than half the installations that we can afford to subsidise today with the new rate. It was not an accident that the British Photovoltaic Association intervened on our side in the courts, precisely as a result of that calculation.

Caroline Flint: Seven times I have asked the Minister of State what these cuts will mean for jobs; seven times he has tried to hide the fact that his cuts will put thousands of people out of work. According to his figures, released on Friday,
	“in the 2012/13 to 2014/15 period…the total number of gross full-time equivalent jobs will be 1,000 to 10,000.”
	That is not additional jobs; that is the total number. Nothing can hide the sheer incompetence of the Government’s handling of this. Is it not about time that the Government stopped thinking about saving face, creating more uncertainty and wasting even more money on more legal challenges, and sat down to work out how we are going to put the industry on a sustainable footing?

Christopher Huhne: I realise that the right hon. Lady supported a different candidate for the leadership of her party from the winning candidate; nevertheless, given her repeated attempts effectively to undermine the former decisions of the Leader of the Opposition, as well as her failure to recognise their consequences, I would merely remind her, as she now likes to lecture us about the impact assessment, what the impact assessment showed in February 2010. It is important that she should go back—as she wants to look at this—because that impact assessment showed that the cost of the scheme introduced by the now Leader of the Opposition had a net present value of £8.6 billion, while the benefits had a net present value of £400 million. If she thinks that is the sort of policy making of which she is prepared to be proud, good luck to her.

Mr Speaker: Order. May I just say to the Secretary of State that that answer—about which he felt strongly—was too long? There must not be a repetition of that, and if there is, I will cut it off. That is the end of it.

Jo Swinson: The Secretary of State is right to say that the design of the scheme he inherited from Labour was flawed. However, by continuing with that scheme for 18 months, coupled with apparently poor legal advice, the implementation of FITs that he has presided over has been somewhat chaotically managed for consumers and businesses alike. I am concerned that a letter from the Minister of State says that if there is no action, proposals may have to be brought forward to close the FITs scheme. What reassurance can the Secretary of State give that FITs will be put on a sustainable footing for the rest of this Parliament?

Christopher Huhne: I entirely reject the idea that we did not act to deal with this issue as soon as we were advised. The problem with the design of the scheme was that it was unable to cope with the dramatic fall in the cost of solar panels. That dramatic fall, the reason for which I have already described, became apparent over the past year, and we acted as quickly as we could to deal with the situation. What is unforgivable is the fact that the present Leader of the Opposition failed to foresee, by looking at best practice internationally, how the scheme should have been designed in the first place.

Energy Bills

William Bain: What steps he is taking to help households to reduce their energy bills.

Gregory Barker: The coalition is taking action to help consumers to reduce their bills. The Department of Energy and Climate Change has launched the “check, switch, insulate to save” campaign, which was showcased in big energy week. That measure, together with the new warm home discount, the winter fuel and cold weather payments, the carbon emissions reduction target and community energy saving programmes, the Warm Front scheme and signposts on bills to the cheapest tariff information, will help hard-pressed consumers. However, the green deal will be the game-changer that the country really needs.

William Bain: Does the Minister grasp the seriousness of the situation facing families across the country? The average fuel bill is now £1,345 a year—an increase of 48% in the last five years. When are the Government going to act to pare back the system of tariffs—the number of which has risen by 70 in the past year under this Government—which discriminates against those who use the least energy?

Gregory Barker: I am afraid that it was actually under the last Labour Government, when the present Leader of the Opposition was Secretary of State, that the number of tariffs went up to 400, an increase of 75%. We are now getting to grips with that, but if the hon. Gentleman wants to blame someone for the proliferation of tariffs, he should blame the total inaction of the then Secretary of State.

Jo Johnson: Does the Minister realise that he could help businesses, as well as households, to reduce their energy bills, by introducing mandatory motion-sensitive lighting systems? That would reduce the carbon intensity of our built environment and promote the ability of many people to enjoy starry, starry nights.

Gregory Barker: That is just the kind of technology that will be brought into the reach of millions of homes by the green deal, and it is just the kind of innovation that we want to spur. We would also look at how we might drive that by making amendments to consequential improvements. I am very interested in my hon. Friend’s ideas.

Caroline Lucas: It is understood that there has been a significant underspend, of up to £30 million, in the Warm Front scheme, because DECC has made the eligibility criteria too strict and has not promoted the scheme. That means that up to 20% of the scheme’s funding could go unclaimed. Is it correct that there will be an underspend at the end of the financial year, and if so, what is the reason for it?

Gregory Barker: The hon. Lady is right; we are slightly behind. The unseasonably warm weather that we have had this winter, compared with the cold weather last year, has meant that the number of applications has been lower. However, I am in touch with the leaders of our big metropolitan authorities, and I have spoken to the big six energy companies, Citizens Advice and others this week in order to drive forward the roll-out of Warm Front to ensure that we do not have the underspend that she has highlighted.

Anne McIntosh: The green deal has just been described as the “game-changer”, but the concern being expressed by those living in Thirsk, Malton and Filey is that it will push up their household energy bills. Will the Minister follow up the suggestion put to the Prime Minister yesterday by looking favourably on schemes such as biomass, rather than unreliable wind farms, in the green energy mix?

Gregory Barker: My hon. Friend is a little bit confused. Biomass and other forms of renewable heating or electricity generation have nothing to do with the green deal,
	which is an energy efficiency roll-out that will reduce the amount of electricity and heating required in homes, but I will certainly be happy to look at her ideas.

Caroline Flint: According to an answer that I received to a question just the other day, the underspend is actually £32 million, so it has gone up. We all know that soaring energy bills are contributing to the cost of living crisis afflicting millions of families. Millions of pensioners over the age of 75, who are the most susceptible to the cold weather and the least able to access the advantages of online energy deals, pay more for their electricity and gas than they need to. Surely it is only fair that energy companies should guarantee that elderly customers over the age of 75 should be placed on the cheapest tariff for their gas and electricity. Will the Government ensure that the energy companies have access to the data that they will need in order to achieve that?

Gregory Barker: As I said earlier, the number of tariffs proliferated by 75% in the last three years of the Labour Government, when they had the opportunity to do something about this. We actually want everyone to be on cheaper tariffs, but there is lots to do, because of the appalling inheritance from the last Government. We want everyone to get a good deal, not just the over-75s, and we are taking action to make that happen.

Kyoto Protocol

Caroline Dinenage: When he expects a decision to be taken on the EU target for carbon emission reductions under the second commitment period of the Kyoto protocol.

Gregory Barker: The EU must submit a target for the second commitment period of the Kyoto protocol at the UN conference of parties at the end of the year in Qatar. There is a debate in the EU about whether to increase its 2020 emission reduction target from 20% to 30% from 1990 levels. The UK is a leading advocate of a 30% target.

Caroline Dinenage: The Secretary of State has publicly and consistently expressed his desire to see the EU 2020 emissions reduction target increase to 30%, but what concrete action will he take to realise that ambition?

Gregory Barker: We are very active on this agenda. The Secretary of State and I firmly believe that the EU should submit a 30% target in the Kyoto protocol. We are working closely with ministerial colleagues from key member states to build support for a 30% target, directly engaging the more sceptical. At the Environment Council in March, the Secretary of State will argue strongly for approval of the EU low-carbon road map, which sets out milestones for reducing emissions through to 2050.

Strait of Hormuz

Christopher Pincher: What assessment he has made of the potential effects on UK oil and gas supplies of any disruption of shipping through the Strait of Hormuz.

Harriett Baldwin: What assessment he has made of the potential effects on UK oil and gas supplies of any disruption of shipping through the Strait of Hormuz.

Christopher Huhne: We have made assessments of the impacts of short-term disruptions to shipping through the strait for both oil and gas. There is no reason to believe that such closure would create a physical shortage of oil or gas in the UK. Price impacts would depend on the exact nature of the disruption. The UK has access to a wide variety of oil and gas sources and routes, including production from the UK continental shelf, imports from Norway, storage, and oil and liquefied natural gas from global markets.

Christopher Pincher: Given that 20% of the world’s traded oil, and 35% of the seagoing trade, passes through the strait every day, presenting a significant terrorist risk, will my right hon. Friend encourage the diversification of supply, including overland pipelines, such as project Nabucco, the Abu Dhabi pipeline and the Iraq pipeline across Saudi Arabia, despite its being called IPSA?

Christopher Huhne: My hon. Friend is right to highlight the overland capacity. Unfortunately, the IPSA pipeline, as he may know, is not currently functioning—I do not know whether that is anything to do with its namesake. Diversification is a crucial part of our strategy, and the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), and I have been working hard on getting closer relationships with some of our key suppliers, including the Norwegians.

Harriett Baldwin: My constituents already suffer from high fuel and heating oil prices, so will the Secretary of State reassure them that EU sanctions on Iranian oil will not cause further price pressures in that market?

Christopher Huhne: I would love to assure the hon. Lady that we are able to have greater control over the politics of the middle east than has been the case so far, but the reality is that that part of the world is extremely sensitive geopolitically. As she may know, HMS Argyll is supporting the USS Abraham Lincoln in the carrier group, and we are sending out clear signals that we want the issue dealt with in the most rapid way.

Albert Owen: Coupled with the potential problem of oil import is the problem of a lack of oil refinery capacity in this country, made worse by the Petroplus decision to close refineries in the south-east. What assessment have the Government made of refinery capacity, and what are they doing to increase that capacity?

Christopher Huhne: The hon. Gentleman misunderstands the situation in the refinery market. With regard to Petroplus, the problem with Coryton has been the over-capacity in the refining market, which has led to shaved margins. We are working to resolve that as quickly as possible.

Tom Greatrex: Although the Secretary of State has reflected on the potential disruption through the Strait of Hormuz
	and on the point made by my hon. Friend the Member for Ynys Môn (Albert Owen) about refining activity, and although it is good news that the tankers have resumed distribution from the refinery this morning, will he update the House on whether oil is now being delivered to the refinery for refining activity?

Christopher Huhne: There is indeed a cargo ready to be delivered this morning, and there have been contingency back-ups. I know that BP has been working closely with us on this matter and I very much hope that normal activity will resume.

Tom Greatrex: I thank the Secretary of State for that response, which will, I am sure, bring comfort to many people. As well as the 850 jobs, including those of contractors at the refinery, that are at risk, he will know that the background is that this situation is less to do with the refinery’s operation and more to do with the financial structure of the Switzerland-based former owners. Given the significant role played by UK-based refineries in providing energy resilience, is he concerned that the ownership of such a significant number of UK-based refineries is now overseas?

Christopher Huhne: We have traditionally benefited enormously in this country, both under the previous Government and under this Government, from our open-door policy on foreign investment. Indeed, we own a substantial amount of investment in other countries. The swiftness with which the arrangements have been put in place suggests that there is no case for reviewing that policy at this stage.

Smart Meters

Gordon Henderson: If he will hold a review of the smart meter infrastructure upgrade.

Charles Hendry: The introduction of smart meters will unlock huge benefits for the people of this country. There is a solid evidence base to support the roll-out, and it is important that we start to realise the benefits sooner rather than later. The coalition Government have published detailed plans showing how we will deliver smart meters; the last thing we need is more delay.

Gordon Henderson: I welcome that answer, but will my hon. Friend do something to ensure that the programme costs are reported and properly controlled in the interests of those who will pay the bills—that is, the consumer?

Charles Hendry: My hon. Friend makes a very important point. That is one of the most important mechanisms we have in any part of Government policy to bring benefits to consumers. The total cost of the programme is estimated to be about £11 billion and the benefits are estimated to be about £18 billion, so there will be £7 billion of benefits, and that we is why we want to see it happening as soon as we can.

Bill Esterson: Suppliers of mobile phones include warnings with new devices about the potential danger of electromagnetic radiation. Does the Minister think that suppliers of smart meters should do the same?

Charles Hendry: We believe that people will benefit from having smart meters, but we will not make them obligatory. If people are concerned about the electromagnetic issues, they will not be required to have one. We have been willing to give assurances to hon. Members on that account.

Andrew George: There is little incentive for supply companies to inform their domestic customers better on their rate of energy use, so although I appreciate what the Minister has said so far, what can the Government do to ensure that that process of better awareness and better information is speeded up?

Charles Hendry: A very important part of this programme is education. Smart meters will work only if the consumer understands how to use them effectively to get the best value for money out of them. We are drawing a very clear distinction between education and sales practice because we do not want the installation of smart meters to be an opportunity for unscrupulous sales practices.

Energy Efficiency

Dave Watts: What steps he is taking to encourage households to improve their energy efficiency.

Alan Whitehead: What steps he is taking to encourage households to improve their energy efficiency.

Christopher Huhne: The Government have established the energy efficiency deployment office to develop an overarching energy efficiency strategy. We will launch the green deal later this year, which will radically improve take-up of energy efficiency measures. We want every home to have a smart meter by 2019 so consumers have much greater control over their energy use.

Dave Watts: Is the Secretary of State proud of the fact that this is the first Government since 1970 who have not had a programme to help poor families with their fuel costs? Is it not the case now that many poor families will get less help, and that there is virtually no targeting of those resources that are available to the poorest families?

Christopher Huhne: The hon. Gentleman has clearly been hibernating over the past few months if he believes that we are not helping poor families. First, the warm home discount scheme, which is a statutory scheme for reducing costs, will disburse two thirds more money than was disbursed under the voluntary scheme operated by the Labour Government. Secondly, the affordable warmth obligation in the energy company obligation subsidy will take over from Warm Front. Thirdly, we have asked Professor John Hills to conduct a thorough review of fuel poverty, which will lead to some interesting and important recommendations.

Alan Whitehead: Does the Secretary of State accept that the ECO’s affordable warmth element, which comes to £325 million, is substantially less than the Warm Front commitment of £370 million and the CERT
	commitment of £600 million? Does he accept that that is a substantial reduction in affordable warmth for those on lower incomes? Even now, will he review the split in costs in relation to affordable warmth and those who can pay, or look for other methods of dealing with the issue?

Christopher Huhne: It is important that the hon. Gentleman compares like with like. He should remember that what is available under the ECO subsidy helps holistically to improve the energy efficiency of the whole home and is not like the Warm Front, which was largely a boiler replacement scheme. That proposal is out for consultation and we are listening to responses.

Stephen Mosley: The green deal skills alliance has highlighted the importance of having the right skilled professionals in place to deliver the green deal to households. How will my right hon. Friend ensure that we have the right number of skilled energy efficiency assessors, installers and training providers to make sure that when the green deal comes in this year we can deliver it?

Christopher Huhne: My hon. Friend is absolutely right that such skills will be essential for the green deal—indeed, for the whole low-carbon economy. That is precisely why we have been working closely with the Department for Business, Innovation and Skills, which takes the lead on skills. We have a national skills academy for environmental technologies, which is developing standards, delivering training and upskilling tradesmen and technicians. We also have funding for the renewables training network that is run by Renewable UK, and a talent bank for the gas, power, waste management and water industries, which is led by the Energy and Utility Skills sector skills council.

Luciana Berger: I understand that the Government have not yet even designed the training programme for many of the people who will have to deliver the green deal. Ministers have been claiming for months that the green deal will mean the creation of thousands of jobs, but the Department’s figures show that the number of energy efficiency installations will plummet in the first year of the scheme, with cavity wall insulations set to fall by 67% and loft insulations by a staggering 90%. That will cripple the sector and, according to Europe Economics, could lead to the loss of 3,000 jobs. Will the Secretary of State protect those jobs by adopting Labour’s proposals to include hard-to-treat cavity walls and lofts in the ECO?

Christopher Huhne: I think the hon. Lady misunderstands a couple of issues. First, the green deal is a very different scheme precisely because it is designed to support a complete retrofit. We are talking not just about cavity wall insulation or loft insulation but about many other measures as well. The second point is that she is quoting the first impact assessment. It has always been the case that the take-up of the green deal will depend on the triggers and incentives that have been introduced for take-up, which have increased substantially since the figures she quoted.

Energy Efficiency

Barry Sheerman: What steps he is taking to engage charities and social enterprises in projects that will reduce their energy consumption.

Christopher Huhne: All property types, including those belonging to charities and social enterprises, will be eligible for the green deal which begins later this year. Charities and social enterprises will be eligible for up-front support to cover improvements, which will be paid back gradually through savings on energy bills. We are also running a £10 million fund to support communities, including charities and social enterprises, in understanding their current energy use and the opportunities to reduce demand, as well as in developing renewable energy schemes locally.

Barry Sheerman: Charities and not-for-profit groups up and down the country have enormous in-house expertise on this matter and are ready and willing to do more work with businesses and local authorities on the green deal. Good firms such as Morrisons do a great deal in partnership work. Could the Secretary of State do more to encourage more partnerships between local authorities, the private sector and charities such as Urban Mines, which I chair?

Christopher Huhne: I am very happy to join the hon. Gentleman in encouraging the third sector in this regard. However, I point out that we recently announced 82 community winners in the first tranche of DECC’s £10 million local energy assessment fund, which share in £4.2 million to undertake feasibility studies for proposed community energy and energy efficiency schemes. The winning communities in the remaining, second tranche are due to be announced in early February.

Prepayment Meters

John Robertson: What the level of debt is by which a prepayment meter customer is able to change supplier.

Charles Hendry: The debt assignment protocol helps prepayment meter customers with a debt of £200 or less to switch, providing the new supplier agrees to take on the debt. Ofgem monitors the protocol’s effectiveness by recording the number of customers blocked from switching as a result of having a debt.

John Robertson: I am sure the Minister will understand my question when I mention that because of debt 200,000 customers are trapped on tariffs that they cannot get out of. If the level was extended to £350, a lot of those people would be able to get their debt down. What is he doing to try to deal with that and will he persuade Ofgem to set the figure at £350?

Charles Hendry: The hon. Gentleman raises an important point, and I shall ask Ofgem to look at the issue in detail. Many people are on prepayment meters because they were already in debt and it was a way of trying to manage their repayments to get them back on a firm
	footing. Clearly, we want people in all circumstances to be able to benefit from lower tariffs and it is important that they should be set at the right level in that part of the protocol.

Michael Weir: Whether or not they are trying to switch, many people on prepayment meters are clearly fuel-poor. What action is the Department taking to monitor self-disconnection among that group?

Charles Hendry: We understand that about 20% of those who are fuel-poor are on prepayment meters, and we will clearly look at any reasons why anybody is disconnected. If they are required to be disconnected by the supplier, the evidence has to be reported to us and those figures have fallen very sharply in recent years, but if people are self-disconnecting we need to understand the reasons behind that.

British Antarctic Survey

Oliver Colvile: What assessment he has made of British Antarctic Survey research on the effects of historic industrialisation on global carbon dioxide levels.

Christopher Huhne: Ice core measurements by the British Antarctic Survey reveal that over the last 800,000 years, global carbon dioxide levels varied between 180 and 300 parts per million. Those peer-reviewed results provide crucial data on past natural levels for climate science research. Observations show that global atmospheric carbon dioxide levels are currently increasing at about two parts per million per year, and are now at 391 parts per million, as a result of emissions from industrial and other human sources.

Oliver Colvile: May I thank the Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) for going to Bristol recently to launch the marine energy strategy? How does my right hon. Friend the Secretary of State perceive it working in delivering fewer CO2 emissions and helping with the energy strategy?

Christopher Huhne: Marine energy parks are an important part of developing a tremendously good natural resource for us in this country. We may not have quite as much sunshine as in southern Spain or Arizona, but we have an awful lot of wind, an awful lot of waves and an awful lot of tidal resource. Within the ministerial team, my hon. Friend the Minister of State has been leading the charge on marine energy parks precisely to make sure that we do not let those enormous opportunities slip through our fingers.

Kevin Brennan: Does the Secretary of State have three points he would like to share with us on the main conclusions of the research?

Christopher Huhne: I can certainly point to one conclusion of the research that I think is absolutely crucial: measurements of current carbon dioxide levels show that they have increased by nearly 40% since pre-industrial times, and carbon isotope information shows that this has largely been caused by the burning of fossil fuels.
	Drilling down into ice cores is a fascinating way of finding out what was happening in prehistory, and it thoroughly underlines the importance in the science of our addressing those issues. One thing that as politicians we cannot do is negotiate with scientific conclusions as robustly supported as these.

Competition

Nicky Morgan: What steps he is taking to ensure a competitive energy market.

Charles Hendry: Greater competition requires more companies taking part in the market, and increased transparency for consumers. Ofgem will shortly announce proposals to improve wholesale market liquidity and it is important that the regulator takes decisive steps. We have also taken action to cut red tape for small suppliers and Ofgem has published radical proposals to help suppliers to simplify their tariffs and billing information, helping consumers switch supplier and thereby boosting competition.

Nicky Morgan: I thank the Minister very much indeed for his reply. The people who should benefit from a competitive energy market are the companies’ customers—our constituents. Is he aware of the practice by some energy companies of repeatedly putting up direct debit payment demands? The customer then has to call the company to negotiate them down, but the next time a bill arrives the direct debit has gone up yet again. What does he think of that behaviour by our energy companies?

Charles Hendry: One of the most important aspects of a functioning energy market is transparency; people need to be clear about why their prices are changing and the factors that contribute towards that. The requirement for greater transparency and more information on bills is therefore a fundamental part of the reforms that we see coming through.

Barry Gardiner: Does the Minister recognise that the insistence on the energy performance certificate at level 3 in order to qualify for the new solar PV fix will be anticompetitive in its practice? The industry has said that it may contribute to reducing employment in solar PV down to 8% of the current levels of employment, and yet it is not related to gas, which is used most for warming Britain’s homes.

Charles Hendry: I hope the hon. Gentleman would agree that it is important that if people are receiving a subsidy for electricity which is generated, they should have generally well insulated homes and they should not be wasting it—[Interruption.] But for many people it does help. That was a proposal that was put forward in the consultation process. We have had many responses to that. We are currently considering those with a view to making a final decision.

Renewable Energy

Jim Cunningham: What recent discussions he has had with the Secretary of State for Business, Innovation and Skills on growth in the renewable energy sector.

Gregory Barker: My right hon. Friend the Secretary of State and I have regular meetings with ministerial counterparts in the Department for Business, Innovation and Skills on a variety of topics, including renewable energy issues.

Jim Cunningham: What discussions has the Minister had with the Business Secretary regarding the 45,000 jobs that could be lost in the construction industry over the next three years and the impact that will have on green energy delivery?

Gregory Barker: I regularly discuss renewable energy with colleagues, but we remain very optimistic about the future for British renewables. We inherited a terrible position from Labour, third from bottom of the EU table, but I am glad to say that as of December 2011 there was 11 GW of installed renewable electricity, 15.5 GW in construction and 10.5 GW in planning; and in the hon. Gentleman’s constituency this month we have seen £12 million invested in Geothermal International, alongside £2.5 billion of announced investments since April 2011. That is a very encouraging picture.

John Thurso: A major area of growth for the renewable energy industry will be marine energy, particularly, of course, the Pentland firth. I congratulate the Minister on the renewable energy park that he has put in the south-west and I thank him for the conversations we have had on turning the Pentland firth into a renewable energy park. Can he tell me what progress we are making?

Gregory Barker: I was delighted that this week we were able to launch the UK’s first marine energy park, and under the coalition marine energy in the UK is finally getting the drive forward that it has needed for years. The hon. Gentleman played a key role in developing marine energy potential in Scotland, and I should like to invite him to host a board meeting of the marine energy programme board in Caithness in the summer, where I hope we shall have some good news on the creation of the second marine energy park in the UK, in Scotland.

Emissions

Hugh Bayley: What support his Department provides to community initiatives to help households reduce their carbon emissions.

Gregory Barker: The coalition has big ambitions for community energy. Last week, we announced 82 community winners in the first tranche of DECC’s £10 million competition to help mobilise community energy groups. I will be announcing funding for at least another 100 winning schemes early next month. This new fund is just one element of our strategy to drive local and community energy action.

Hugh Bayley: We need consistency in Government policy. City of York council has spent time and money developing a solar energy scheme for council houses, and yet it has been blown out of the water by the Minister’s announcement of 31 October. In order to
	ensure continuity of policy, will the Government agree that those councils whose schemes to develop solar energy for council houses were being developed before the announcement should continue to get the feed-in tariff at the previous rate?

Gregory Barker: Unfortunately, the scheme that the hon. Gentleman refers to—the feed-in tariffs—was devised and implemented by Ed Miliband—[Interruption.]

Mr Speaker: Order. The hon. Gentleman should observe the correct forms of address, and he should not refer—[Interruption.] Order. He should not refer to another Member by name in that way. He should briefly finish his answer and resume his seat.

Gregory Barker: The feed-in tariffs were devised by the right hon. Member for Doncaster North (Edward Miliband), and unfortunately did not anticipate a single scheme of the type to which the hon. Member for York Central (Hugh Bayley) refers. Under our reformed and restructured feed-in tariff schemes, in the future we very much hope that those schemes will be able to be supported, unlike the shambles of the scheme that we inherited from Labour.

Wind Farms

Mark Pawsey: What discussions he has had with National Grid on the shutting down of wind farms during times of high wind intensity.

Charles Hendry: Ministers and DECC officials have regular discussions with National Grid about the operation of the electricity network, and this has included the issue of transmission constraints, including our consultation on the transmission constraint licence condition. Reducing or increasing output of generators of all types is a normal part of National Grid’s role in balancing the network at all times. Wind is not treated any differently from any other technology in this respect.

Mark Pawsey: My constituents in Rugby, who face applications for wind farms, will be concerned about reports that turbines are switched off in times of high wind speeds because the current infrastructure is unable to handle the amount of electricity generated. When that happens, National Grid pays operators compensation—

Mr Speaker: Order. Can we have a quick question? We have to move on, so we need a brief sentence with a question mark at the end of it.

Mark Pawsey: What steps has the Minister taken to protect consumers from that element of the increase in their electricity bills?

Charles Hendry: About £250 million was paid last year in constraint payments, of which only 10%— £24 million—was paid to the wind sector. The Government are reviewing the transmission constraint licence condition and trying to ensure upgrades are made in many parts of the country, so that the power generated can get where it is needed.

Jonathan Ashworth: Given the importance we attach to National Grid maintaining balance in the system, will the Minister tell us what discussions he has had with National Grid on how it contracts with short-term operating reserve aggregators? There is concern that National Grid is paying for so-called phantom megawatts and the cost is being passed on to consumers. Does the Minister agree that we need an independent auditor?

Charles Hendry: In all these matters, National Grid is regulated by the official regulator, Ofgem. The STOR arrangements play an important role in the process, ensuring that when there is a significant and sudden change in requirement, generation capacity to meet that demand is available. Of course that important function of our grid system must be operated in a transparent way.

Topical Questions

Bill Esterson: If he will make a statement on his departmental responsibilities.

Christopher Huhne: Since my Department’s last Question Time, I have attended the UN climate change conference, where the UK delegation as a whole played a key role in securing the Durban platform, a road map to a global legal agreement. DECC has published the carbon plan, which sets out how we will meet our first four carbon budgets; we have consulted on incentives for solar energy as part of our review of the feed-in tariff scheme; and our clean energy plans took an important step forward with the opening of the UK’s first carbon capture and storage plant in November last year.

Bill Esterson: The right hon. Gentleman neglected to mention the defeat in the High Court. My constituents Mark Davenport and Brian Malone lost money setting up solar power companies. Will the Government compensate people who lost money as a direct result of the Secretary of State’s illegal actions?

Christopher Huhne: Evidence of the very sharp take-up when we announced that we were getting to grips with the problems of the scheme shows that those involved in the industry had plenty of forewarning. As in any other sector, businesses take risks: sometimes the rewards are high and sometimes they are not.

Priti Patel: No new nuclear power stations have been built in this country for more than 20 years. How confident is the Secretary of State that Britain will possess all the relevant skills and supply chains necessary to create a thriving nuclear industry in this country?

Christopher Huhne: My hon. Friend is right to highlight the importance of skills to the nuclear industry’s revival, especially as so many who work in that industry are nearing retirement. That is why the Minister of State responsible for energy, my hon. Friend the Member for Wealden (Charles Hendry), has been working so hard with the Department for Business, Innovation and Skills
	to make sure, through the nuclear skills academy and other measures, that the skills are there so that we can deliver on time—and we will.

Kate Green: The St John’s Sunshine project in Old Trafford in my constituency planned to use feed-in tariffs to fund big society community projects, but Gavin Wood told me yesterday that those involved now feel that proceeding with the project would be a gamble. What assurances can the Government offer that Ministers will make good on their promises to community projects and offer them the certainty they urgently need?

Christopher Huhne: As I have made clear in the House before, I wish we had been able under the law to provide separate support to the community schemes that have come forward, but we were not able to do that under the legislation passed by the previous Government. We will consult on that. I merely point out, as I did to the hon. Member for Harlow (Robert Halfon), that the continued fall in the cost of solar panels will make more and more schemes viable.

Laura Sandys: The green deal is very dependent on consumer uptake and consumer trust in the energy companies. What sort of expertise has the Department in terms of understanding consumer behaviour and how will we be able to deliver this programme through consumer behaviour change?

Gregory Barker: My hon. Friend has considerable experience and understanding of consumer behaviour, and she will be pleased to know that we have a specific consumer behavioural insight team in DECC, but the greatest value comes from liaising with retail companies with real track records, such as Kingfisher, B&Q, John Lewis, Sainsury’s and Tesco. Ultimately, it is the private sector that will guide our thinking and be responsible for the success of the green deal.

Albert Owen: The Secretary of State seemed to misunderstand my question on oil refinery capacity earlier. Oil and petroleum trade bodies tell me that there is a shortage of oil refinery capacity in this country, and that crude oil is exported to India and brought back in. What assessment has the Secretary of State made of that, and how is he responding to that serious question?

Charles Hendry: It is a very serious question and I am grateful to the hon. Gentleman for pursuing it further. Some of the crude produced in this country is not suitable for use here because of the diesel demand and therefore it is exported, and the diesel fuel tends to have to be imported, which results in an imbalance. Through the downstream oil infrastructure forum we are looking at the industry’s strategy to put in place a long-term programme to assess how we can support and build up that industry, and the role of international investors is critical to that process.

Philip Davies: Further to the question from my hon. Friend the Member for Rugby (Mark Pawsey), what estimate has the Secretary of State made of the number of wind turbines that
	stopped working at some point during the year, and how many of those stopped working due to too little wind and how many of them stopped working because of too much wind?

Christopher Huhne: I will happily come back to my hon. Friend on wind turbines, but just because someone falls off a ladder does not mean that the House jumps to abolish ladders. In a similar sense, the operation of wind turbines, particularly those that are onshore, which are most economic, provides an increasingly important contribution to our energy needs, which is home-grown and not likely to be buffeted by events in the middle east.

Chi Onwurah: Four thousand five hundred employees of Carillion, headquartered in my constituency, went into Christmas on notice of redundancy due to the arbitrary and clearly illegal changes to the solar feed-in tariffs. We all agree that tariffs need to be reviewed, but will the Minister not help to end the terrible uncertainty in which Carillion employees are living by accepting the High Court decision and taking the time to review the policy properly?

Christopher Huhne: I have already referred to the substantial costs and the fact that the industry would face a substantial reduction in the number of potential installations were we to accept those costs. I merely point out as well that going forwards we have attempted to provide that certainty, precisely because we laid the order, making sure that the new rate will be available from the beginning of March.

Andrew Rosindell: Has the Minister made an assessment of the energy sources that may or may not be available in some of the British overseas territories, particularly the Falkland Islands?

Christopher Huhne: The matter of oil exploration around the Falkland Islands is a lead responsibility of the Foreign and Commonwealth Office. Exploration is under way. Some of the initial exploration undertaken in territorial waters was disappointing, but that may change in future.

Joan Ruddock: Having been a Minister myself in the Department of Energy and Climate Change, I cannot believe that officials did not warn the Secretary of State and Ministers of the folly of setting a cut-off date before the end of the consultation period. Will he not now apologise to those whose plans have been ruined and whose jobs have been lost, and acknowledge that a review was provided for in the Labour Government’s legislation?

Christopher Huhne: The right hon. Lady sadly does not draw attention to the fact that there was no system of automatic degression under that scheme. However, she will be interested to hear that the general point that we should learn all the lessons required to be learned from this episode is not lost on the ministerial team, and I have ensured that we are doing precisely that. I do not think that it will come to conclusions that will be entirely to the right hon. Lady’s liking.

Robin Walker: Does the Secretary of State agree that swift action to deal with metal theft is vital to protect our energy infrastructure, and will he therefore join me as a member of the all-party group on combating metal theft in welcoming today’s statement from the Home Office?

Christopher Huhne: I certainly welcome today’s statement from the Home Office and think that the right hon. Lady the Home Secretary is putting forward some excellent ideas on how to deal with this problem. Metal theft affects all networks, including electricity networks, and because it affects networks it has a much broader cost than many other crimes.

Ben Bradshaw: The Government’s incompetence and arrogance over the feed-in tariff fiasco has been staggering. The industry and the public need certainty, so will he now try to answer the question my right hon. Friend the Member for Don Valley (Caroline Flint) asked him earlier, abandon his costly and doomed legal case and sit down with the industry to agree a sustainable solution?

Christopher Huhne: As I have already pointed out, a substantial part of the industry intervened in the court case on our side. This is the best way forward for the sustainable growth of the industry. We have also laid the order that will provide absolute certainty on the tariff rate we are providing from 3 March, so I think that the right hon. Gentleman is being uncharacteristically churlish.

Tessa Munt: On Tuesday the Institution of Engineering and Technology is due to publish its long-awaited report on the undergrounding of electricity transmission lines. Given that 1,000 new pylons would have a significant effect on the natural environment and the landscape, what steps has the Secretary of State taken to ensure that the study considers the wider economic benefits of undergrounding to tourism, particularly in my part of Somerset, and the lifetime maintenance costs of undergrounding compared with using mile upon mile of pylons?

Charles Hendry: It is a very important study. As part of the process of understanding whether the grid should be under or above ground, we need to start with an assessment of the real costs of undergrounding and overgrounding. This authoritative study is the most dedicated of its kind ever carried out and makes an important contribution to the debate. It will not answer all the questions, but it is an important element.

Fiona Mactaggart: The Minister will be aware that the cost of smart meters will be borne by us in our electricity bills, but the benefits will not automatically accrue to the consumer. How will he ensure that the most vulnerable, poor and elderly consumers benefit from the installation of smart meters and are protected from disconnection?

Charles Hendry: The hon. Lady makes an extremely important point. One of the keys to the success of smart meter roll-out is the education programme that will go with it to ensure that householders know how to use them to their greatest benefit. We are talking to consumer groups to ensure that that is done in the most
	effective way and looking at how we can involve parish councils, local charities and other organisations trusted by consumers to ensure that they get the greatest benefit as quickly as possible.

George Eustice: The Minister mentioned the creation of the south-west marine energy park, which is a tremendous boost to projects such as Wave Hub in my constituency. Does he agree that projects being assessed for capital grants to develop wave power should be given preference if they are located within the marine energy park?

Gregory Barker: The reason we have created marine energy parks is to bring together resources in a co-ordinated and strategic fashion, which has not happened in the past. My hon. Friend’s point is extremely well made and very valid. I expect a significant part of the Department’s research budget—£20 million—to be set aside for wave and tidal technology and to flow to his part of the world.

Julie Hilling: The energy companies tell us that very few customers are disconnected, but we know that many customers are so-called self-disconnected because they cannot afford to put credit on their pre-payment meters, especially if they are already paying off previous arrears through the meter. Will the Minister as a matter of urgency ask the energy companies how many people are self-disconnected?

Charles Hendry: As I said earlier, it is important that we understand why people are disconnected. If there is not enough clarity about why people are self-disconnecting, we will ask for more details on why that is happening.

Neil Parish: Mid Devon district council, which is based in Tiverton, was planning just before the tariff rate was cut to have 1,800 social homes with solar panels. Will Ministers be prepared to meet officials from the council to discuss a way forward?

Gregory Barker: I would be delighted to meet my hon. Friend to discuss the matter. Obviously we want to build a consensus on the way forward. I will publish plans for the reform of the feed-in tariff so that we can put it on a much sounder footing and learn from the mistakes of the system we inherited.

Ian Lucas: What assessment has the Secretary of State made of the Government’s liability for their unlawful actions in bringing in the feed-in tariff consultation?

Christopher Huhne: We disagree, respectfully, with the Court of Appeal’s judgment, and that is precisely why we intend to go to the Supreme Court. Clearly, given that we disagree, the issue of liability at this stage does not arise.

Gordon Henderson: Half an hour ago the Thamesteel works in my constituency went into administration, with the potential loss of 400 jobs. Obviously I hope that the administrators will find somebody to take over the plant as soon as possible, but any successor will face similar problems with the high cost of energy as do so many other companies in the energy-intensive industry. What can my right hon. Friend do to help such companies?

Christopher Huhne: As my hon. Friend knows, the Chancellor of the Exchequer announced in the autumn statement that we will bring forward a package to help the energy-intensive industry—

Mr Speaker: Order. I enjoy greatly listening to the Secretary of State, but can he please face the House? Then we will all have the benefit of his eloquence.

Christopher Huhne: We will therefore bring forward that package with a consultation paper, and there will be detailed proposals at that point.

John Cryer: In the light of the court case that has been mentioned and the Secretary of State’s comments this morning, it is clear
	that the Department is no longer fit for purpose. Is he really telling the House that he is going to drag the Government’s reputation further into the mire and waste further large amounts of taxpayers’ money in order to pursue what is really a wasted cause?

Christopher Huhne: Let me reiterate the point that, if we were merely to accept the number of installations after our reference date and before 3 March, we would add £1.5 billion to the total cost of the scheme. That is what Opposition Members are asking us to do. If we were to go further, the cost would be even greater. If the hon. Gentleman thinks that that is a price worth paying, he is entirely consistent with what else Opposition Members say on economic policy, but it is not something that will be entertained by Government Members.

Business of the House

Angela Eagle: Will the Leader of the House please give us the business for next week?

George Young: The business for the week commencing 30 January will be:
	Monday 30 January—Second Reading of the Civil Aviation Bill.
	Tuesday 31 January—Conclusion of consideration in Committee of the Local Government Finance Bill (day 3).
	Wednesday 1 February—Consideration of Lords amendments to the Welfare Reform Bill.
	Thursday 2 February—General debate on the transparency and consistency of sentencing.
	The provisional business for the week commencing 6 February will include:
	Monday 6 February—Second Reading of the Financial Services Bill.
	Tuesday 7 February—Opposition day (un-allotted day) (half-day). There will be a debate on an Opposition motion, subject to be announced, followed by business to be nominated by the Backbench Business Committee.
	Wednesday 8 February—Motions relating to the police grant and local government finance reports.
	Thursday 9 February—General debate on the Somalia conference.
	I should also like to inform the House that the business in Westminster Hall for 9 February will be:
	Thursday 9 February—Debate on the seventh report of the Culture, Media and Sport Committee on “Football Governance”.
	Earlier this week, all colleagues should have received an e-mail on behalf of the House service, inviting them to participate in the 2012 survey of services. As well as providing an opportunity for Members and their staff to provide feedback on the services we currently use, it will also help the House service and the House of Commons Commission to identity priorities for the next few years, when budgets will be tighter. I encourage colleagues to find a few minutes to take part.

Angela Eagle: I thank the right hon. Gentleman for his response and for finally announcing three whole days of actual Government business—for, I think, the first time since October. The Leader of the House wanders about saying that Parliament is not a legislative factory, but if he were running a factory he would have had us all sent home on half pay ages ago.
	I raised last week the extraordinary situation of the Business Secretary lining up a speech to a think-tank in order to announce his proposals on executive pay. The Leader of the House promised to remind the Business Secretary of his obligations under the ministerial code. I fear he would not make a very good factory foreman, because it took an urgent question to force the Business Secretary to come to the House first. Did the right hon. Gentleman forget to remind the Business Secretary, or are Government relations so poor that his Liberal Democrat colleague just ignored him?
	Another Minister who is reluctant to come to the House is the Chancellor. Despite two weeks of terrible economic news, he has made no appearance at the Dispatch Box. This week’s GDP figures showed that the economy is shrinking, not growing; 2.7 million people are out of work; and family budgets are under extraordinary pressure. This time last year, the Government’s excuse for the shrinking economy was the snow. We have now had the mildest winter for 350 years, and the economy is still contracting; it was too cold last year, and it is too warm this year—the country is tired of excuses from a Government who refuse to take responsibility for their own disastrous economic mismanagement.
	Given that the Chancellor was not present for Treasury questions, will the Leader of the House be a bit more of an assertive factory foreman and insist that he come to the Chamber? If the Chancellor does ever condescend to reappear at the Dispatch Box, we could ask him about the bonus scheme for the chief executive of the Royal Bank of Scotland. I fear that the Leader of the House will be unsuccessful in coaxing the Chancellor out of hiding, so perhaps he will now explain why RBS, a state-owned bank bailed out by the taxpayer, wants to give its chief executive a £1 million bonus this year. The board of RBS is thinking of paying its chief executive in one day more than someone on average earnings would make in a lifetime. We have heard the synthetic outrage from those on the Government Benches, but the question is, what are they going to do about it?
	Government incompetence plumbed new depths this week when the local government Minister ended up in the Aye Lobby supporting an amendment that he had rejected moments earlier at the Dispatch Box. Will the Leader of the House confirm that the Minister, on realising that he was locked in the wrong Lobby, bravely took refuge in the toilet while a Conservative Minister barked orders at him through the doorway? The Government’s legislative agenda has been bogged down for months—[Laughter.] It says something about the incompetence of the Government that it took the Serjeant at Arms to flush the Minister out—[Laughter.] The local government Minister has inadvertently revealed the Liberal Democrats’ new political strategy—if in trouble, run for the toilet.
	Last night, the Government suffered a crushing defeat in the House of Lords. Their proposal to charge lone parents for using the Child Support Agency is simply “unjust”; I am quoting a Conservative peer. I agree with a former Conservative Lord Chancellor, a former Conservative party chairman and a former Liberal Democrat Chief Whip—why on earth will not the Government? The party of Lloyd George is reduced to this: voting to take away support from young people with cancer, the disabled and lone parents. I quite understand why Liberal Democrat Ministers have taken to hiding in the toilet.
	It is more than a year since the Health and Social Care Bill was first introduced. It started at 353 pages; by Second Reading, it had grown to 405 pages; and now, almost 2,000 Government amendments later, it weighs in at a colossal 445 pages. In the Leader of the House’s legislative factory, MPs are sat around twiddling their thumbs, but the Clerks are run off their feet redrafting the Government’s disastrous Bills.
	The growing length of the Health and Social Care Bill has not won over critics—the royal colleges, doctors, nurses, patient groups and the voluntary sector all now oppose the Bill. Even the Select Committee on Health, chaired by a former Conservative Health Secretary, has questioned what the Government are doing. The Health Secretary is about the only person in the country who still believes in the Bill. Is it not time that the Government listened and dropped this disastrous measure?

George Young: On the programme before the House, we believe in a balanced diet, including proposed legislation. For the hon. Lady to describe as “twiddling our thumbs” Opposition days, Back-Bench business days and serious debates, such as the one I have announced on Somalia, does a genuine discourtesy to the House.
	My right hon. and hon. Friends are fully aware of the ministerial code and I remind them about it from time to time.
	The Chancellor of the Exchequer was at ECOFIN on Tuesday, which is why he was not at Treasury questions. I am sure that if the hon. Lady reflects on her days at the Treasury, she will understand that from time to time the Chancellor has to represent this country overseas and therefore cannot appear in the House.
	I am surprised that the hon. Lady raised the subject of bonuses, as the contract that entitles Mr Hester to a bonus was put in place by the Labour Government. We have done something that they failed to do: we have limited cash bonuses to £2,000 at RBS and Lloyds, and we will do the same this year. We have also said that the bonus pool at RBS and Lloyds will be lower and more transparent this year than last year—something else that the Labour Government failed to do. So far as this year is concerned, no decision on bonuses has been taken.
	I have looked at Hansard , and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), voted the right way. I understand that after so doing, as an act of generosity, he went to refill one of the carafes on the Table so that his fellow Minister would be refreshed during the remaining stages of the debate, when he was entrapped in the opposite Division Lobby. I understand that there were fraternal greetings. We are all grateful that my hon. Friend emerged from the Lobby unharmed.
	On the Child Support Agency, I understand that the provision to make charges was introduced by the Labour Government. We all know from our constituency work that the CSA is in need of reform. All too often, it lets down those it seeks to help. Part of the purpose of that reform is to encourage more settlements outside the CSA. The proposal to which the hon. Lady referred is part of that process.
	On the Health and Social Care Bill, many of the amendments to which the hon. Lady referred were called for by the Opposition, so I hope she will welcome them. In due course, this House will deal with Commons consideration of Lords amendments.

Several hon. Members: rose —

Mr Speaker: Order. A large number of right hon. and hon. Members are seeking to catch my eye. Ordinarily, I seek to accommodate everybody, but I give notice that that will almost certainly not be possible today, because
	I have to protect the Back-Bench business. There is an important topical debate on the European Council and an important debate on defence, both of which are heavily subscribed. To get in the maximum number of colleagues on business questions, I am looking for short questions and the usual short answers from the Leader of the House.

Alan Haselhurst: Will my right hon. Friend say how many communications he has received from my constituents on the Daylight Saving Bill? Would he care to reply to them through me by saying whether there is any prospect of his providing more time for this subject, if not next week, at some point in the future?

George Young: I am grateful to my right hon. Friend. A good number of e-mails have found their way into my inbox. Of course I understand the strong feelings that have been expressed by our constituents about what happened last Friday. I commend my hon. Friend the Member for Castle Point (Rebecca Harris), who did heroic work in bringing the Bill forward and enabling the House to consider it last Friday in a form of which the Government approved. The Government supported the Bill as it passed through. I have considered my right hon. Friend’s suggestion of providing more Government time. I do not think that that would do the trick, because it would not be this Bill that would get more time, were more time to be provided. There is also the question of whether the Bill would have time to get through another place. My view is that at the beginning of the next Session, somebody should pick up the baton from my hon. Friend the Member for Castle Point and try another private Member’s Bill. I remind the House that in previous Parliaments this has always been a subject for private Members’ Bills. I think that that is the right way to make progress.

Natascha Engel: Last week the Procedure Committee published its excellent report on e-petitions. Together with the Backbench Business Committee and the Hansard Society, we will hold a seminar on the future of e-petitions on 6 March. Will the Government therefore indicate when they will produce a response to the report so that we can have a debate in the Chamber in which the whole House can express an opinion on the future of e-petitions?
	On the subject of time, the Backbench Business Committee is overwhelmed with demands for debates on issues such as metal theft, daylight saving and UK Trade & Investment—very important subjects that we do not have the time to allocate for debate. Perhaps the Government can help the Backbench Business Committee and the House to bring forward some of those topics for debate by allocating more time to the Committee while we are waiting for business to come from the other House.

George Young: I am grateful to the hon. Lady. The important subjects she mentions, which hon. Members want to debate, are referred to as “thumb twiddling” by the hon. Member for Wallasey (Ms Eagle). I welcome the report from the Procedure Committee. I am broadly sympathetic to its proposals, which build on the success of e-petitions. I note what she said about the time of her
	seminar, which I greatly welcome. The Government will seek to respond to the e-petition debate shortly after that seminar.
	Standing Orders provide that a minimum of 35 days should be provided in each Session, and so far we have provided 49. However, I recognise the demand to which she refers, and we will seek to respond to her bid for more time between now and the end of the Session.

Greg Knight: May we have a debate on bad budgeting and the wasting of public money? Has my right hon. Friend seen reports today that the cost of the London Olympics is likely to balloon from £2.3 billion to more than £12 billion—a huge sum that will bring no benefit at all to many parts of the country, including East Yorkshire? When that flaming torch goes round the country, will not the fuel that it is burning be pounds sterling?

George Young: I am surprised by how my right hon. Friend greets the London Olympics. I think he will find that benefits are spread broadly throughout the country, not least from much of the work that is now taking place. My understanding is that the Olympics will be held within budget and that the work is on time. No events are being held in North West Hampshire, but my constituents broadly welcome the London Olympics as something that they are proud this country is holding, and they are glad that the flame is going through North West Hampshire. I wonder whether my right hon. Friend accurately reflects all the views of his constituents.

Valerie Vaz: May we have an urgent statement from the Secretary of State for Health on why he dismissed the Health Committee’s report as “Westminster nonsense” and “out of date”? He is now telephoning all the royal colleges to tell them to withdraw their opposition to the Bill. Will the Leader of the House use his good offices to get the Secretary of State out of his bunker and into the Chamber?

George Young: The Government will respond in due course to the Health Committee report that was published on Monday, and the House will debate the remaining stages of the Health and Social Care Bill when it completes its passage in another place. I think that my right hon. Friend was perfectly entitled to defend the Government’s view on the radio and elsewhere on Monday, and of course he will continue to be held accountable in the House at Question Time and in Opposition day debates, which were also described as “thumb twiddling” by the hon. Member for Wallasey.

Bob Russell: May we have a debate on the charitable not-for-profit sector to deal with what has been described to me as the “Tescofication” of the sector, which is contrary to the big society and localism? For example, Ormiston children and families trust, which operates across the east of England, is about to lose seven of its Sure Start centres in my constituency because Barnardo’s has come in and hoovered it up.

George Young: I am sorry to hear of the potential loss of Sure Start centres in my hon. Friend’s constituency. I would be happy to pursue the issue with my right hon.
	Friend the Secretary of State for Work and Pensions, who is anxious to build on the Sure Start initiatives and extend the help that they offer to many people.

Heidi Alexander: Last Friday, a handful of hon. Members waffled on for the best part of five years—[ Laughter ] It felt like it! I mean five hours—to kill the Daylight Saving Bill. In how many other workplaces does the Leader of the House think it would be acceptable for individuals purposely to waste time, and what is he going to do to change the practice here?

George Young: I understand the sense of frustration that the hon. Lady expresses, which is shared by many of my constituents. She will know that the Procedure Committee is conducting an inquiry into the calendar, included within which is a section on private Members’ Bills. As I said before, I have examined the matter, and in my view there is no practical way for that Bill to complete its passage through both Houses in the remainder of the Session, even if the Government were to provide time. The best way for it to be taken forward, as I suggested earlier, is for someone to build on the heroic work of my hon. Friend the Member for Castle Point.

Bob Blackman: One of the first decisions that Mayor Boris Johnson took was to ban the consumption of alcohol on public transport. That has meant that thousands of passengers have been able to enjoy their journeys to and from home. Now, the old pretender threatens to remove the ban if he is re-elected. May we have a debate on the consumption of alcohol on public transport?

George Young: I am grateful to my hon. Friend for bringing to the attention of the House and the wider public some of the issues that will confront Londoners later this year, when they will have to make a choice between the current Mayor of London and the old pretender, as he put it. One of the many reasons for continuing to vote for Boris is exactly the initiative that he mentions.

Graeme Morrice: Has the Leader of the House been given notice that the Exchequer Secretary to the Treasury intends to make a statement, either written or oral, about the closure of 15 offices of Her Majesty’s Revenue and Customs, which was announced yesterday?

George Young: I am not aware of any announcement, and I believe that there is no written ministerial statement today from my hon. Friend the Exchequer Secretary. I will make some inquiries about the issue that the hon. Gentleman raises.

Jeremy Lefroy: May we have a debate on postal prices? Many of my constituents are alarmed by the proposed rises in second and first-class stamps. One of them, Mr Burton, put it very well when he expressed his concern that he would lose the pleasure of the written word.

George Young: I am aware of my hon. Friend’s concern, and I will raise the matter with ministerial colleagues at the Department for Business, Innovation
	and Skills, who have responsibility for it. He will know that there are efforts to extend competition in postal services, in order potentially to bring down some of the costs of posting mail.

Chris Bryant: I do not think the Leader of the House knows his own power. It would be perfectly possible for the Government to take on the Daylight Saving Bill and ask the House of Lords to agree to carry-over to allow it to go into the next Session, then we would be able to have it on the statute book in the next few months. Rather than succumbing to the witterings of a few Members last Friday, why does he not back the wholehearted support for the Bill of nearly everybody else in the House and ensure that it comes to pass?

George Young: I notice that the hon. Gentleman, when he was Deputy Leader of the House, took no steps whatever to change the procedure for private Members’ Bills. It has not changed at all, nor is he right in what he says about carry-over in the other place.

Robert Buckland: Can time be found for a debate on planning applications for mobile telephone masts? The transparency of those applications is causing real concern to many residents in my constituency, and we would welcome a debate at the earliest opportunity.

George Young: I understand my hon. Friend’s point, and many of us are aware of concern in our constituencies about communication masts, although my impression is that there is much more sharing than there used to be. There was consultation last year on a national planning policy framework, which included a section on communication masts. That consultation has ended, and the Government will announce their conclusions shortly. I cannot promise a debate, but there may be an opportunity for further discussion when that process is complete.

Dave Watts: In answer to a question about cuts affecting disabled children asked by my right hon. Friend the Member for Stirling (Mrs McGuire), the Prime Minister said that she was “wrong”. We now know that she was in fact correct. Will the Prime Minister come to the House to make an apology and correct his inaccurate statement?

George Young: My right hon. Friend was quite right in what he said yesterday. I have made some inquiries, and under the introduction of universal credit there will be transitional protection to ensure that there is no cash loss for those whose circumstances otherwise remain the same when they migrate from their existing benefit. The Prime Minister was absolutely right in what he said.

Damian Hinds: With jobs and growth right near the top of the agenda, Tuesday’s Westminster Hall debate on self-employment was massively oversubscribed by Government Members. Sadly, the entire parliamentary Labour party was unavoidably detained elsewhere. May we have another debate in Government time to allow the Labour party to join the debate on jobs and growth?

George Young: I am sorry that there was an apparent lack of interest in self-employment among Opposition Members. I am sure that their constituents are as interested as ours in the opportunities available for self-employment, particularly under the new enterprise allowance scheme, which I hope will give many people an opportunity to commence their own business and in due course begin to employ other people.

Pete Wishart: What are the Government going to do about the Scotland Bill? It is back in the Lords today, like a sad, eccentric old aunt that nobody wants to visit. After the momentous events in Scotland of the past couple of weeks, as we move towards independence, are not the Government starting to think about pulling the plug on the sad old dear?

George Young: Absolutely not. The Scotland Bill will implement commitments that I believe all three parties made. The reason progress is not being made at the moment is that one of the options in the consultation document, as I am sure the hon. Gentleman is aware, was to amend the Bill. We need the consultation process to end before we decide whether it needs to be amended as was suggested in that document.

Karen Bradley: Tomorrow morning I will have my monthly slot on Moorlands Radio, which is on 103.7, in case you, Mr Speaker, should ever be in Staffordshire Moorlands. It is a great community local radio station, and like many up and down the country it provides access to information for local organisations, charities, events and good causes. However, it faces many challenges, so will the Leader of the House find time for a debate on community local radio stations and what we can do to support them?

George Young: I am sure that we would all like to take part in that debate, particularly if it were recorded by our own community radio stations. The Government are a keen supporter of community radio and allocate some £450,000 to the community radio fund. I commend my hon. Friend’s work to get more resources for Moorlands Radio. All such radio stations are a means for MPs to communicate with our constituents, listen to their concerns and reflect them in the House.

Barry Sheerman: Will the Leader of the House shed some daylight, if not sunlight, on what the universities Minister is getting up to? We had a White Paper on higher education, but now it has seeped out of the Department for Business, Innovation and Skills that there will be no higher education Bill. What is going on? There is a rumour that there is some bold initiative on higher education that is so secret that someone would have to be shot if they heard it.

George Young: In which case, I am very glad that I have not heard it.
	The contents of the Queen’s Speech will be made available to the House in due course. Not only is the date of that event still unknown, but its contents are still a matter of ministerial discussion.

Greg Mulholland: May we have a debate on the process of applying for village
	green status? In 2004, “Keep Yeadon Banks Green” applied for village green status for Yeadon Banks. Several attempts by Leeds Group plc to block it have been overturned, including in the High Court, but now, in 2012, we are having to take the matter to the Supreme Court, which is outrageous. May we have a debate on simplifying the process so that areas get the protection they need?

George Young: I understand that part of the matter is covered in the Localism Act 2011, but many hon. Members have the same problem as my hon. Friend. I will draw it to the attention of Ministers at the Department for Communities and Local Government, but I am sure that many people would welcome any efforts that he might make to have it debated either in this Chamber or in Westminster Hall.

Madeleine Moon: N-ergy is a social enterprise working across more than 40 prisons in England and the five Welsh prisons, offering vocational and employability programmes to offenders and ex-offenders. However, like many successful SMEs working in specialist areas, it is unable to bid for public procurement contracts because its turnover is not seen as being high enough. May we have a debate on developing a separate public procurement process for SMEs, so that some of their innovative and new ideas can be brought into Government contracting?

George Young: I commend the work that many voluntary organisations do to help those who are in prison get the skills that they need to cope when they leave. There will be an opportunity to raise that specific issue with my right hon. Friend the Minister for the Cabinet Office, who has responsibility for procurement, on 8 February, but in the meantime I will raise with him the option that she mentions of having a separate category so that organisations such as the one to which the hon. Lady refers might be able to bid for public contracts.

Mark Lancaster: May we have a debate on apprenticeships? I am sure that the Leader of the House will join me in congratulating the sponsors of the new Milton Keynes apprenticeship academy, which opens today and specialises in IT and accountancy. With such a rise in apprenticeships, does he agree that it is vital that they should be led by demand from businesses?

George Young: I welcome what is happening in my hon. Friend’s constituency, and the issue of apprenticeships was touched on in the Opposition day debate that we had on Monday. He will applaud the work that the Government are doing to increase the number of apprenticeships very substantially, and I agree entirely that that should happen in response to the needs of businesses. Apprentices should get the skills that they need to apply for the jobs in our constituencies.

Ben Bradshaw: I hope the Leader of the House sensed the House’s disappointment in his reply to the right hon. Member for Saffron Walden (Sir Alan Haselhurst) on the Daylight Saving Bill. Given
	the overwhelming support for the Bill, the outrageous wrecking tactics last Friday and the fact that this House is not exactly inundated with Government business, why does the Leader of the House not introduce a Government Bill in the next two weeks?

George Young: I believe that, like the hon. Member for Rhondda (Chris Bryant), the right hon. Gentleman also had responsibilities as Deputy Leader of the House in a previous Parliament, and he took no steps whatever on reform.

Chris Bryant: Answer the question!

George Young: In response to that heckling, I have already answered the question. I have looked at the matter. There is no way that a Bill could complete its passage through both Houses in the time available. My advice remains that a successful Member in the ballot in the next Session should pick up the baton currently held by my hon. Friend the Member for Castle Point (Rebecca Harris).

Several hon. Members: rose —

Mr Speaker: Order. I remind the House that there is heavy pressure—extensive pressure—on time, and I would appeal to colleagues who might have dreamed up lengthy questions to shorten them to single sentence questions. If they do so, they will be helping other colleagues to get in.

John Glen: Will the Leader of the House urgently make time for a debate on judicial reform in the Republic of the Maldives? Although the judiciary is constitutionally independent, sitting judges are underqualified, often corrupt and hostile to the democratically elected regime.

George Young: The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North East Bedfordshire (Alistair Burt), is seized of this problem and is in touch with the Maldives President to see whether we can resolve the impasse. The high commission in Colombo is also engaged. We want to help the Maldives to make progress towards democratic reform in the direction that my hon. Friend the Member for Salisbury (John Glen) outlines.

Paul Blomfield: May I press the case for a statement from the Business Secretary on higher education policy, to end the uncertainty that has been created by the Government’s chaotic way of developing their policy, which is causing enormous damage to our universities?

George Young: I reject the hon. Gentleman’s accusation of confusion. There will be an opportunity to cross-question my right hon. Friend the Secretary of State for Business, Innovation and Skills the next time his Department answers questions. Our proposals for education reform that have gone through the House have been broadly welcomed.

Andrew Percy: In the autumn statement the Chancellor provided the Humber bridge
	with £150 million so that tolls could be cut, for which all had argued. Sadly, a Labour council in the region has rejected that offer, meaning that our tolls could stay at £3 for vehicles. May we have statement from the Transport Secretary on that subject?

George Young: I understand my hon. Friend’s concern. I will, of course, raise the issue with my right hon. Friend the Secretary of State for Transport to see whether she can take any action to resolve this dilemma.

Gavin Shuker: The House will be aware that the climate change risk assessment was published this week, because it was briefed heavily two days ago to the newspapers. Hon. Members will have seen it in their papers this morning, but as yet no executive summary is available in the Vote Office. Will the Leader of the House have a word with the Secretary of State for Environment, Food and Rural Affairs and ask her to pull her finger out?

George Young: I may make a request, but it will not be so indelicately put as the hon. Gentleman suggests. I will convey his concerns to my right hon. Friend and see whether she can respond constructively.

Mark Menzies: Dementia is one of the cruellest diseases of our age. Will my right hon. Friend make time available to discuss not only dementia but the support we provide to those who care for sufferers?

George Young: My hon. Friend raises an important subject. Some 600,000 people care for those who suffer from dementia. The Government have sought to help by putting £400 million into the NHS to provide the resources for breaks for those people. We outlined our strategy in a document published last year. I would welcome a debate; my hon. Friend might like to approach the Backbench Business Committee.

Denis MacShane: May we have a debate on the extraordinary refusal of Mr Christopher Graham, the Information Commissioner, to reveal details to some 17,000 victims of newspapers that were blagging and finding out personal details using Mr Steve Whittamore? It is extraordinary that the Information Commissioner—of all people—is denying the British people their right to know. The details are with the police and the newspapers, but not with the victims themselves. This is not Stasi time for the Information Commissioner.

George Young: The right hon. Gentleman will know that there is a process of appeal against the Information Commissioner’s decisions, which is open to those who object to them in the way that he has outlined. I am not sure that it would be appropriate for the Government to get involved.

James Morris: The people of Halesowen and Rowley Regis are rightly anxious to see action against the something-for-nothing society at all levels. May we have a debate in Government time to explore why the previous Government did not get undertakings on executive pay from banks that took taxpayers’ money, and a debate on what this Government are doing to curb bankers’ bonuses?

George Young: I would welcome such a debate. My hon. Friend will know that we have introduced a bank levy that raises £2.6 billion a year, and reduced bonus payouts, which are now some 40% lower than under the previous Government, who, as he says, took no action whatever in that important area.

Joan Ruddock: Following the farce of last Friday, will the Leader of the House agree that it is important for the Speaker to be given powers to limit the length of speeches by Back Benchers in debates on private Members’ Bills?

George Young: You, Mr Speaker, will have heard that question, which was directed towards you rather than me. I would not want to prejudice my position in any way by beginning to answer it.

Gavin Barwell: May we have a debate on what the Chancellor has done to tackle tax avoidance and on what else could be done, so that hard-pressed taxpayers in Croydon and elsewhere can be confident that they are not paying a penny more for people who are allowed to get away without paying their fair share?

George Young: My hon. Friend raises an important issue. We are introducing measures that will raise around £4 billion over the current Parliament by clamping down on tax avoidance. Some 2,250 HM Revenue and Customs staff are moving into a new anti-evasion and avoidance unity. We took action in the previous Budget to close loopholes.

Kevin Brennan: Why have the Government failed to provide support or time for the Metal Theft (Prevention) Bill, which was due to be discussed last Friday? It is supported by hon. Members on both sides of the House in every party, and there is a crisis out there in the country. It could have got through in time. What is the reason for the Government’s lack of support? Is it petty party politics?

George Young: I do not know whether the hon. Gentleman has had time to look at the written ministerial statement by the Home Office today, but it outlines the action the Government are taking on scrap metal dealers. I know he was on television earlier this morning, which may have detained him from looking at that.

Martin Vickers: My constituents are dismayed to find that, following the resignation of one of their MEPs, they will have no say in who her successor will be. Their cynicism in the political process increased when they found that her successor will be her husband. Will the Leader of the House find time for a debate on the process of replacing our MEPs?

George Young: The process that my hon. Friend outlines—whatever feelings it may engender—is set out in statute and enshrined in legislation. I would be misleading him if I said I had any plans to amend it.

Caroline Lucas: The Government’s decision to appeal against the Court ruling that it was illegal to slash solar tariffs retrospectively
	raises critical questions about whether the UK is a safe place to invest at all. The CBI has said that it
	“creates a mood of uncertainty that puts off investors”.
	May we therefore have an urgent debate on the impact of that decision on investor confidence in the UK?

George Young: I cannot promise an early debate, and the hon. Lady will know—I suspect that she was in her place—that that was dealt with at some length an hour ago in Department of Energy and Climate Change questions.

Andrew Jones: The average weekly earnings for jobs in my constituency are £450—£23,400 per year less than the regional and national average. My area has therefore benefited disproportionately from the increases in personal tax allowances. Please may we have a debate on the work the Government are undertaking further to reconnect work and reward?

George Young: My hon. Friend makes a good point. He will have an opportunity next Wednesday when we debate amendments to the Welfare Reform Bill to develop his arguments at greater length. The steps we are taking are designed precisely to do what my hon. Friend has suggested—to make work pay and remove some of the perverse disincentives from the system that we inherited.

Barry Gardiner: May we have a debate in Government time on the sustainability of the London Olympic games following the resignation this morning of Ms Meredith Alexander as the sustainability commissioner? She said that she resigned in protest against the commission being used to justify the sponsorship deal between the London Organising Committee of the Olympic Games and Paralympic Games and Dow Chemical. She has made particular allegations about irregularities, saying that 12 out of 13 commissioners knew nothing about a report that was claimed to be produced by the commission.

George Young: My right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport was asked about this earlier by the Select Committee on Culture, Media and Sport, and gave the Government’s response. As the hon. Gentleman knows, Dow did not own Union Carbide at the time of the tragedy and I do not think there are good reasons, as my right hon. Friend the Secretary of State said, for taking the action that was taken.

Michael Crockart: Would my right hon. Friend agree to a debate about the provision of Government services to the deaf and hard of hearing? On Monday I had the first surgery with a deaf British sign language user in my constituency using Deaf Action’s SignVideo system over the internet. We must be assured that all services, whether in education, health or justice, are equally accessible.

George Young: I am sure that every Member of the House would agree with the proposition, which my hon. Friend has just put forward, that services should be more accessible to those who are deaf or hard of
	hearing. I will raise the issue with my hon. Friend the Under-Secretary of State for Work and Pensions, who has responsibility for disabilities, and then let my hon. Friend know what steps we have already taken in this area and what further steps are planned.

Bill Esterson: The Leader of the House will be familiar with the saying “Where there’s a will, there’s a way”. The public want a Bill on daylight saving, as do Members across this House. Will he think again? Will he find the will and find a way?

George Young: I understand the hon. Gentleman’s concern. Indeed, I myself sponsored a such private Member’s Bill with my hon. Friend the Member for South Suffolk (Mr Yeo)—I think it was in the Parliament before last—and I had exactly the same problem that the hon. Gentleman has just referred to: his party’s Government did nothing whatever. I have outlined a way forward. The Government have agreed a Bill in the terms produced by my hon. Friend the Member for Castle Point, and I think that is the best way forward.

Robert Halfon: May we have a debate on lower taxes for lower earners, given that poor motorists will be hit twice as hard as richer motorists if petrol and diesel duties rise? Can my right hon. Friend urge the Chancellor to cut petrol and diesel tax in the next Budget?

George Young: I will relay to my right hon. Friend the Chancellor the bid that my hon. Friend has just made. I commend what he did with the e-petition on the issue last year, which resulted in the postponement of an increase that was due earlier this month.

Jonathan Ashworth: I thank the Leader of the House for scheduling a debate on the Somalia conference—a debate that I called for last week. May I ask him for an urgent statement on the businesses affected by the riots and disturbances last August? Leicester businesses have learnt that they are not eligible for any money from the policy authority, and we learnt from the Minister for Policing and Criminal Justice yesterday that they are not eligible for any of the other compensation schemes either. Leicester businesses are hugely disappointed about that, if not furious, as am I.

George Young: I am grateful to the hon. Gentleman, not least for the plug for business questions on his blog earlier this week. I am also grateful for what he said about the Somalia conference. Compensation is available for those who suffered loss in the riots, either from the police authority or from local government. I will chase up the issues that he has referred to and see whether we can make progress to help his retailers.

Philip Davies: Can we have a debate on employment tribunals? A large number of businesses in my constituency are concerned about the number of vexatious complaints that are taken to employment tribunals, which they find very expensive to defend against, particularly in these times. I know that the Government want to help with this, and a debate in the House might help them in that regard.

George Young: My hon. Friend will know that we have proposed some changes to the employment tribunal regime, one of which would oblige those who are taking cases to an employment tribunal to make a contribution towards the costs. I hope that those and other initiatives that we announced last year will go some way to meeting my hon. Friend’s aspirations.

Robin Walker: Can the Leader of the House advise how the scores of hon. Members who spoke out in the Back-Bench debates on BBC local radio can put on record their support for the recommendations made by Lord Patten yesterday that many of the planned cuts be reversed and that afternoon programming be protected?

George Young: I am grateful to my hon. Friend; that sounds an appropriate subject for a Backbench Business Committee debate. I welcome what Lord Patten said yesterday when he indicated that some of the proposed closures of local radio stations were being rethought. I am sure that we would all support that initiative and want to encourage whatever support is necessary to maintain local radio in our constituencies.

Christopher Pincher: Can we have a debate on the right to buy, giving us an opportunity to discuss how we can help all those strivers out there and the Opposition the opportunity to turn up, which they did not do in the self-employment debate?

George Young: I would welcome another debate on self-employment. We hope that the new enterprise allowance will help up to 40,000 unemployed people start up businesses by 2013. We all have a role to play in bringing home to our constituents the opportunities available for self-employment, which have been promoted by some of our initiatives.

Priti Patel: My constituent Mr Philip Wright has been persecuted by HMRC for more than 12 years over a test case involving construction workers and their contracted terms of employment. In light of the huge cost of this case for the taxpayer, can we have a debate on HMRC, and in particular, when it will stop harassing my constituent and bring the case to an end?

George Young: Sitting next to me on the Front Bench is the Financial Secretary to the Treasury, who has noted the protest that my hon. Friend has made and has now undertaken to raise it with his colleague—

Mark Hoban: The Exchequer Secretary.

George Young: My hon. Friend has undertaken to raise the matter with the Exchequer Secretary, who has responsibility for taxation.

Graham Evans: Given the recent unemployment figures, can we have a further debate on High Speed 2 and how it will directly create tens of thousands of jobs in the midlands and the north, solve the capacity challenge of the west coast main line and help equip our economy to compete in the 21st century?

George Young: I am grateful to my hon. Friend for his support for HS2. I think I am right in saying that we have recently had at least one debate on HS2. Whether there is appetite for another one in the immediate future I am not sure, but I am grateful to him for his support for the project.

Tessa Munt: The main difference between the rich and the poor is, of course, that the rich have money to save and the poor have to spend nearly every penny they have. Will the Leader of the House please give time for a debate in the run-up to the next Budget on the obvious merits of raising the income tax threshold to £10,000 before 2015, lifting more people out of income tax altogether?

George Young: My hon. Friend will know that section 29 of the coalition agreement sets out a commitment to raise the threshold to £10,000 during this Parliament, and the Deputy Prime Minister is making a statement today. This will be taken on board by the Chancellor as he prepares his Budget statement.

Mr Speaker: I am extremely grateful to the Leader of the House and to colleagues for their brevity, which meant that 44 Back Benchers were able to take part in 35 minutes of exclusively Back-Bench time. That shows what we can do when we try.

Point of Order

Barry Gardiner: On a point of order, Mr Speaker. Have you received a request from the Secretary of State for Culture, Olympics, Media and Sport to come to the House to clarify previous statements made to this House? Those statements made reference to the supposed report for the London Olympics by the Commission for a Sustainable London as the justification for the appointment of Dow Chemical as a sponsor, when the resignation of Ms Meredith Alexander this morning has in fact proved that no such report was prepared by the commission at all. Indeed, 12 out of the 13 members of the commission knew nothing about it until the letter from Shaun McCarthy to my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell).

Mr Speaker: I am sorry to disappoint the hon. Gentleman, but the short answer to his question is no. I have received no such communication, but the concern that he has registered will have been heard by the Leader of the House and others on the Treasury Bench.

BILL PRESENTED
	 — 
	Financial Services

Presentation and First Reading (Standing Order No. 57)
	Mr Chancellor of the Exchequer, supported by the Prime Minister, the Deputy Prime Minister, Secretary Vince Cable, Danny Alexander, Mr Mark Hoban, Mr David Gauke, Miss Chloe Smith and Mr Edward Davey, presented a Bill to amend the Bank of England Act 1998, the Financial Services and Markets Act 2000 and the Banking Act 2009; to make other provision about financial services and markets; to make provision about the exercise of certain statutory functions relating to building societies, friendly societies and other mutual societies; to amend section 785 of the Companies Act 2006; to make provision enabling the Director of Savings to provide services to other public bodies; and for connected purposes.
	Bill read the First time; to be read a Second time on Monday 30 January, and to be printed (Bill 278) with explanatory notes (Bill 278-EN).

Backbench Business
	 — 
	[Un-allotted Day]
	 — 
	European Council

Topical  debate

Mr Speaker: I remind the House that there is a time limit on Back-Bench speeches, which is subject to review.

Natascha Engel: I beg to move,
	That this House has considered the matter of the European Council.
	I would like to take this opportunity briefly to mention to this self-selecting group of Members in the Chamber who are taking an interest in EU Council debates that the Backbench Business Committee now has such debates within its remit. In future, therefore, when Members want to have such a debate before the EU Council meets, they should come to the Backbench Business Committee. I will leave it at that.

Mr Speaker: I apologise: I ought to have explained that the time limit on Back-Bench speeches is eight minutes.

William Cash: I am grateful to the Backbench Business Committee and its Chairman for arranging this debate. I am sorry that the Government did not take note of the unanimous view of the European Scrutiny Committee that such a debate should be held in Government time. However, we now have this opportunity to air our views before the Prime Minister goes to the summit. He is to be congratulated on his use of the veto, which I am bound to say I was glad about because I had suggested its use in my pamphlet “It’s the EU, Stupid”, and in other discussions.
	The proposal for fiscal union vitally affects our national interests and our democracy; it is not just about the single market and the City, essential though those matters are. As I said to the Foreign Secretary the other day, once we have crossed the Rubicon we cannot cross it again, and it is imperative that there should be no backsliding at the summit on 30 January. I totally repudiate the attitude of the Deputy Prime Minister that the non-EU treaty of the 26 should eventually be folded into the EU treaties. The Liberal Democrats are an obstruction to our vital national interests. A house divided against itself will fall, and the situation will be worse still if it is built on sand. There are now two Europes, both built on sand, and the situation is not only precarious but dangerous.
	What is the root cause of the European crisis? It is not merely a eurozone crisis; it is a crisis of the European Union as a whole. Europe is being destroyed on the altar of ideology. The existing treaties, which cover 70% of our legislation here in the UK, have failed and are the root cause of the crisis in Europe.

Martin Horwood: In the light of the hon. Gentleman’s attack on the role of the Liberal Democrats in all this, would he accept that the Deputy Prime Minister’s hosting of the recent summit of European Liberal leaders—including two Prime Ministers, six
	Deputy Prime Ministers and five European Commissioners —to try to bring together a bilateral plan to support jobs, growth and prosperity across Europe was a positive step?

William Cash: We are all in favour of growth, but unfortunately the European treaties themselves work against that aim because of the degree of overregulation, and many other matters that I shall come to in a moment.
	The lack of growth is contaminating the UK economy. Elsewhere in Europe it is creating civil disorder, with youth unemployment of up to 45% in Greece and Spain, and 30% in Italy. The present European Union is completely undemocratic, and the existing treaties should be sent to a convention so that all the member states could have the opportunity to face one another and decide what kind of Europe they want. In the past, when referendums have been held in France, Holland, Ireland and Denmark, the no vote has been overturned by bribing and threatening the electorate. That kind of behaviour, combined with economic and political crisis, creates a fertile breeding ground for the far right, as I predicted as far back as 1990.
	There is no growth in Europe, except in Germany. We cannot grow from a stagnant Europe, and the coalition cannot achieve its main objective of reducing the deficit and achieving growth so long as this paralysis continues. The remedy of the Eurocrats—and, indeed, the leaders of European Government and the Liberal Democrat leadership in this country—is a fatal obstruction to our present and future economic success.
	The approach adopted by the Prime Minister today at Davos reflects the view that I expressed in my pamphlet “It’s the EU, Stupid” and the growth paper that has been circulated to all Members of Parliament and the Lords and others, as well as in my remarks to the Minister of State, Cabinet Office, which is that we need to refocus our trade towards the rest of the world and not rely on the fact that we have 40% to 50% of our trade with the EU to provide the mainspring of our economic future.

Kelvin Hopkins: Emphasis is constantly placed on our trade with the European Union, but it is not always pointed out that we have a massive trade deficit with the EU. Given the austerity measures here and over there—but particularly over there—that is only going to get worse.

William Cash: Indeed. In 2009 there was a trade deficit of £14 billion in goods and services, but since then it has risen to £51 million. Those figures speak for themselves.
	Cuts in public expenditure cannot solve the problem on their own. We need enterprise for small and medium-sized businesses and drastic cuts in overregulation. We need enterprise, not strangulation. Indeed, we must insist on our ability to enter into trade relationships on our own terms, in our own national interests, and not be confined to a single trade policy dictated by the European Commission.
	I was deeply alarmed to read in today’s City A . M .that Angela Merkel at Davos is encouraging more integration. She is quoted as saying:
	“We have to become used to the European Commission becoming more and more like a government.”
	She urges more and more Europe, but that Europe would be both undemocratic and increasingly dominated by Germany itself, as I have repeatedly stated for 20 years, and as The Economist concedes in this week’s edition. It states, following France’s downgrading, that
	“the balance of power has long been shifting from the French President to the German Chancellor”,
	and a former French economic Minister has said that
	“Berlin is alone in the cockpit”.
	That is not healthy for Germany or the UK, and certainly not for Europe. It now seems certain that President Sarkozy is on the way out, and Italy and Greece have technocratic Prime Ministers. Democracy is dwindling and diminishing. The Franco-German partnership is now a hollow reminder of German strength and French weakness. This is all the more reason why the UK must insist on leading Europe out of this crisis with Euro-realist policies and an insistence on government by consent. Sadly, Germany believes in government by rule, and is now even proposing the European Commission as the anchor of European government.
	There has been much agitated activity in seeking to resolve the Greek bankruptcy, but there has been no result. A few days ago I came across a five-page article written in 1998 setting out exactly why Greece should not be allowed into the European Union, which was of course ignored. Every member state is responsible for this failure of judgment and must bear the consequences. It is a pity that those such as George Soros who are now wringing their hands in Davos did not listen to the Euro-realist arguments instead of condemning and mocking them.
	On the draft agreement, we must bear in mind that the issues now being presented to the British electorate and the European Union are more political than legal. There are still fundamental legal problems in the latest draft of the agreement between the 26. There must be no misunderstanding: this deal is flawed in seeking to incorporate the European Commission and the European Court of Justice, which are institutions of the EU, into a non-EU treaty.
	Furthermore, what is the basis in the treaty on the functioning of the European Union for the proposed powers, including infringement powers, to be conferred on the European Commission under article 8 of the agreement? Prima facie, that is unlawful, given the prohibition on infringement proceedings under article 126(10) of the treaty. There are serious doubts about the use of article 273 in relation to issues of jurisdiction. There is also the issue of enhanced co-operation under article 10, which bypasses the treaty requirement that enhanced co-operation should be used only as a last resort; the agreement proposes its use “whenever appropriate and necessary”. This could cause serious damage to British national interests in relation to the internal market.
	My Committee, the European Scrutiny Committee, will be investigating all these matters with the assistance of evidence from witnesses from all sides of the equation. There is a further problem of whether the treaty to establish the European stability mechanism can come into force before the amendment to the Lisbon treaty, so that member states could allow such a treaty, given that the United Kingdom has not yet ratified it. I would be grateful if the Minister would answer these questions
	when he responds to the debate; I hope that he is listening to what I am saying. We urgently need to know whether the Government have received the fifth, and presumably final, draft. If not, will he tell us when they will, and when it will be sent to the European Scrutiny Committee?
	With regard to article 13, will the UK Parliament be involved in the proposed inter-parliamentary conference? If so, will the European Scrutiny Committee be invited to attend? At present no one knows how that arrangement will work in practice—there are serious question marks over the agreement—but we know that it will be determined by German demands and conditions. I do not blame Germany for its pride and defence of its own national interests, but I do not believe that we the UK should pay one penny to provide funds for an EU bail-out which, if it were done within the European Union itself, would be blatantly unlawful.
	Mme Lagarde, who is now head of the International Monetary Fund, openly admitted in September 2010 that to save the euro,
	“we violated all the rules”.
	It is ironic that she should now be in charge of a further attempt to bypass the rules. That is outrageous, and I am glad that America has quite rightly said that it believes that Europe should sort out its own mess. However, that will be achieved through policies for genuine growth, and not through bail-outs with fictitious money and a refusal to face up to Euro-reality.
	We now live in peaceful democratic times, and we must therefore insist on our Westminster democracy as the basis for protecting our national interest. Let us therefore get down to the business of letting the British people have their say, and of saving the United Kingdom from impending disaster and the European Union from itself. We must turn our eyes to the sunlit uplands of enterprise and international trade, earn our way in the world by our own efforts and re-create the foundations of true independence of action and prosperity for our own country.

Gareth Thomas: On a point of order, Mr Speaker. I apologise for interrupting the debate, but my attention has been drawn to media reports about the future of RAF Northolt, which is next to my constituency. Apparently, there might be Government plans to develop RAF Northolt as an alternative to the Boris island airport, or as a satellite terminal for Heathrow. That is potentially of huge concern to my constituents, and I wonder whether you have received a statement from the Government setting out their real thinking.

Mr Speaker: I have received no indication from the Government of their intentions on this matter, but I have a hunch that the hon. Gentleman will pursue the issue doggedly and tenaciously.

Mike Gapes: The decision by the Prime Minister to walk away from potential agreement at the European Council in December is a disaster for our country and for its long-term influence
	in the European Union. No previous Conservative Prime Minister, whether John Major or Baroness Thatcher, had taken such an approach, and we are about to see the consequences of the current Prime Minister’s decision in the developments going on in the European Union this week. ECOFIN met this week to consider the fourth draft of the agreement—on which the House of Commons Library has produced a helpful note—for the proposed inter-governmental arrangement on the future of the eurozone. That fourth draft agreement made some progress at this week’s meeting, but two issues were left for the bigger meeting that will take place in the next few days: further discussion about qualified majority voting and debt and deficit criteria; and the attendance of non-eurozone member states at the summit.

Kelvin Hopkins: I must say that I find my hon. Friend’s speech somewhat astonishing in blaming Britain for the problems in the eurozone. The problem, as the Father of the House said at Prime Minister’s questions yesterday, is that the Germans are refusing to bail out the weaker members.

Mike Gapes: If my hon. Friend looks at Hansard, he will see that I was not blaming Britain for the problems in the eurozone, but saying correctly that our influence in the European Union will be reduced because of the misguided tactics adopted by the Prime Minister.

John Redwood: Will the hon. Gentleman give way?

Mike Gapes: I will make some progress first.
	As a result of the European Union Act 2011, the Prime Minister has boxed himself into a position in which there must be no potential for a referendum in this country. As he was trying to assuage his 81 Europhobic Back Benchers, he took the easy option of making a political decision rather than one in the national interest, which would have been to remain in the negotiations and to carry on trying to influence the outcome. As a result, when discussions conclude on the arrangements, if they are based on the fourth draft agreement—I quote the House of Commons Library Paper—
	“the Heads of State or Government of contracting parties whose currency is not the euro who have ratified this Treaty and have declared their intention to be bound by some of its provisions”
	would be invited
	“to a meeting of the Euro Summit”.
	However, those who did not agree to the intention to be bound by the provisions and were not participating would have no automatic right to attend. The Library paper states:
	“This would appear to exclude the UK as a non-Euro, but crucially also a non-contracting State.”
	There is a potential, therefore, for us no longer to be in the room, even as an observer, because of our misguided decision in December to walk away from the process.

Edward Leigh: Is the hon. Gentleman seriously suggesting that it is wrong not to be in a room that is about as robust as a sinking Italian cruise liner?

Mike Gapes: I suspect that when the eurozone finally resolves the crisis, whether this week, which is doubtful, or on 1 and 2 March, which might be more likely, and when the 20 or so countries—perhaps 25 or 26, depending on how many of the existing 17 euro countries and the others eventually sign up to the package—agree to abide by the provisions, our influence will cease to be as strong as it has been. As a result, one other thing will develop: the pre-meeting discussions that take place within the European People’s party network, the conservative group that dominates the politics of the European Union—the right of centre, not the left of centre, are in control in the EU—the Sarkozy-Merkel meetings, or meetings involving Poland and the new right-wing Government in Spain, will not include the UK. When the bigger countries pre-cook the agendas, we will not be there and we will not be heard. That is potentially very dangerous.

John Redwood: Does the hon. Gentleman not understand that one has to pay to play? If we were in the room, the other countries would expect us to divvy up, as they are short of money.

Mike Gapes: More than half our trade is with the European Union. Our companies, and the future of the City of London and its relationship with the eurozone economy, are greatly affected by what happens in Europe. Those who want to move out to the middle of the Atlantic or who believe that somehow we can reinvigorate the Commonwealth and go back to imperial preference, are not living in the real world for the British economy. Our national interest is to have prosperity and success. As the Chancellor of the Exchequer has made clear, it is in Britain’s national interest for the eurozone to succeed and for the current crisis to be resolved. Clearly, Conservative Members do not agree with the Chancellor’ words. They wish to see the eurozone fail—[Hon. Members: “Rubbish!”] Well, the hon. Member for Gainsborough (Mr Leigh) seemed to say that. If he disagrees, he can intervene again. They want to see the eurozone fail because they believe that somehow that will be in the national interest of this country. It will not.

Several hon. Members: rose —

Mike Gapes: I have no time left.
	It is time that the country looked to its long-term national interests, as opposed to the short-term party interests of this dysfunctional coalition. Those long-term national interests are in working consistently and positively in Europe, and recognising that we have potential allies in Europe. However, our misguided negotiating tactics have forced those potential allies away from us. This is the most self-defeating, insane strategy. It is not in our long-term national interests, and it is a shame for our country.

Damian Collins: Following the remarks of the hon. Member for Ilford South (Mike Gapes), it should be stated clearly that we can never have a negotiating position, in any area of life, let alone in a European Council meeting, if we are never prepared to say no and walk away from the table. Otherwise, people will believe that we will always capitulate, and
	that nothing we say is worth listening to. That must be one lesson that we take from the European Council in December.
	Whatever view hon. Members hold about that Council and the decisions that were taken, we cannot doubt that the European Union is at a fundamental crossroads at which it must confront a number of serious issues that affect all European Union citizens. As the financial crisis has made plain, the European Union—its treaties and economic and monetary union—has not made Europe stronger; indeed, its weaknesses have been made all the more clear. Currency union has not made countries such as Greece, Portugal and Spain competitive with countries such as Germany. In some ways, it has exacerbated their weaknesses. Currency union has made it easier for countries such as Germany to export at low cost across the countries of Europe and has held back the march of competitiveness that should have come in some of the weaker countries.
	The mechanisms of stability and convergence created at Maastricht to try to bring economies closer together have, over the years, been undermined by member states and have not been followed. If they had, perhaps the crisis would not have been as great as it is. We are where we are, however, and the challenge for Europe is now a test of nerve— whether it will plough on in the same old way or whether it is serious about embracing change and leading in a fundamentally new direction towards a Europe that is more competitive and open, which embraces the world rather than seeking to pull in on itself.

Kelvin Hopkins: Does the hon. Gentleman agree that if European Union member states had their own currencies and could adjust them to the appropriate parities for their economies, they would all be more able to reflate and we could have better growth and prosperity for everyone?

Damian Collins: The hon. Gentleman makes a good point and I am sure that citizens in Greece, Portugal, Italy and Spain will be asking in whose interest the survival of the euro is as it stands. They will be able to see that it is in the interests of the Germans and some of the stronger economies, as they have an artificially low currency that makes it easier for them to export across Europe. I am sure that is one reason why the German economy has continued to do well. Those citizens will also ask, however, what is in it for them and whether they—and Europe—would be better off in the long run if countries with weaker economies and bigger problems with debt were able to reach a much more sustainable level for their currency.

Chris Bryant: In actual fact, in countries such as Spain and Greece there is no such campaign to leave the euro—any campaign, such as it is, is very minor. The vast majority of people accept that the euro is there to stay and they want to make it work.
	To return to the hon. Gentleman’s earlier point about the stability and growth pact, the only way that it could have worked would have been if the European Union had had power to enforce audit on countries and to enforce the rules. That is an argument for more Europe, not for less.

Damian Collins: The problem with the stability rules has been that when there should have been interventions or challenges the opportunity has been ducked. That has allowed countries to fudge the rules, has made a shambles of the stability pact and has undoubtedly led to the crisis we face now. It demonstrates something that many hon. Members have known for a very long time: this was primarily a political project and the objective was to get as many countries in as possible and to keep them in whatever the cost, even if the cost was to the member states.
	The other point made by the hon. Member for Rhondda (Chris Bryant) was about the concern in member states about whether staying in the euro is good for them or not. Since the December Council we have seen a greater understanding of what staying in the euro will mean. In effect, as my hon. Friend the Member for Stone (Mr Cash) said in his speech, it will mean that the European Commission will decide on budgets for member states, on debt levels and on spending and will enforce measures through the European Court to correct those states if they do not comply. The price of continued membership of the eurozone will then look increasingly high. I believe that might lead some countries to question whether to stay in—or, perhaps, the markets will make that decision for them. No doubt the events of the next few months will give us a good idea of how that will play out.
	The challenge is for Europe not to continue as a fortress Europe, but, instead, to be a market Europe that looks to open itself up to the world. That is the best thing for its competitiveness and prosperity and for the future of all its citizens.
	This month, the European Council published “The European Council in 2011” , which looks back at the previous year. The President of the Council, Mr Van Rompuy, said that
	“we can draw confidence from the political will we mustered in the past year”.
	I am glad that one person in Europe draws confidence from the political will mustered by the European Council, because I think most people see a failure of leadership and a great deal of concern about the effectiveness of that body to lead in the future.
	In the same chapter of the book, which is entitled “The road ahead”, Mr Van Rompuy goes on to say:
	“The key for the future is to harness the forces of change.”
	I believe that is right: Europe needs to harness the forces of change. That requires a change of direction, however, rather than acceleration down the old worn path, which is where it is heading.
	The document also states that the level of economic integration—in effect, the creation of a common economic policy—will remain high on the agenda for the European Council this year. It states:
	“‘Member States shall regard their economic policies as a matter of common concern’. In 2012, we will further examine a deepening of our economic union, a subject on which I will report to the March European Council.”
	It goes on to say:
	“We must demonstrate that the euro is more than a currency: an irreversible project, a common destiny.”
	That underlines the concerns that many of us have had for some time that the leaders of the European Council
	and leaders in Europe have been blinded by the political objectives behind the euro to whether it is truly sustainable for those countries.
	Hon. Members have already remarked that trade is an important part of our membership of the European Union and that half of our trade is with the EU. That is true, but UK trade figures for the past 10 years show that the growth comes from trade not with the member states of the European Union but with the emerging consumer markets around the world, in Brazil, Russia, China and India. That is common in countries such as Germany, too, because as the world economy grows and there are more consumers, we need to be in the market competing for their goods and services.

John Redwood: Does my hon. Friend recognise that because of the Rotterdam entrepot effect of goods going through that port to other parts of the world and because of large service exports to non-EU countries, the true figure is under a third? It is nowhere near half.

Damian Collins: I thank my right hon. Friend for that important contribution. It follows my point that the future of our trade and growth will increasingly lie beyond the borders of the EU and not solely within it. That should not make us any less European; we must simply recognise that the world economy is growing, that it is growing outside the EU and that those economies are increasingly competitive. They have more consumers with more money in their pockets and more demand for the products we can sell. Our challenge, and that for Europe, is to make ourselves open to those markets. Rather than having European rules and regulations, particularly on social and environmental law, that seek to add costs and make us less competitive, we should review them and consider whether they are truly fit for the modern world in which we live. That would give us the chance to compete in this more competitive and growing global economy.
	That is the crisis that Europe faces as it reaches its crossroads. Its rules and regulations have created a union that is less competitive than it should be and more weighed down with debt. Currency union has not supported the weaker countries but has emboldened and added weight to the strength of those already strong economies, such as Germany. Those fundamental issues must be addressed as Europe faces its crisis. I believe that they are the issues that the Council must tackle. It will require a more flexible and open Europe in which, I believe, the UK can act as a fellow traveller, setting the course of direction. We must be very clear that if Europe will not move and will not change, we cannot afford to be held back by it.

Denis MacShane: It is a pleasure to follow the speech of the hon. Member for Folkestone and Hythe (Damian Collins), which was measured and considered. He will forgive me if I do not embrace his term “fellow traveller” as Britain’s destiny in the coming years, as those of us who know our history do not really like that language.
	I was rather worried when the hon. Gentleman said that “the markets will make that decision for them”, “them” being the people. I rather hope that at some stage we might have some recognition from the Conservative party that markets should be the servants of the people, not their masters.

Damian Collins: The point I was making was that the markets will make the decision for the European Council members and for the Governments and that if they do not act, they will be forced out.

Denis MacShane: I am very happy to hear the hon. Gentleman gloss over his speech, but that is the point I was making.
	I am all for exporting to the BRICs, but their growth rates are slowing. India is talking about a return to “Hindu economic growth” and China might go as low as 8% or 7%, which is a real worry for the Chinese authorities. The same is the case in Brazil—[ Interruption. ] Hon. Members say that that is not bad and, of course, I would love a 7% growth rate for my own country, and I shall come to that. However, rapidly developing countries throughout history have had very high growth rates when peasants and others move from the fields and core industries are developed, but the plain fact is that we export more to Ireland than to all the BRICs combined. Belgium exports more to India than we do. The absurd notion that Brazil, India or Russia, run by kleptocrats, are an alternative to the mature, balanced, middle-class consumer economies of the European Union is not right.

John Redwood: Does not the hon. Gentleman understand that the markets that feed and clothe him are the people? The markets we are talking about today are his pension savings, his other savings and those of millions of other people who are trying to protect themselves from the euro disaster.

Denis MacShane: I do not really want to get into a debate about the markets as I am also pro-market, but the markets are also Mr Hester, the hedge fund billionaires and the donors to the Conservative party who make a fortune out of speculation and who have so increased inequalities in the past 30 years that we now have a generalised social crisis that might cause severe dislocation.
	I do not share the cataclysmic views that some have about what the Prime Minister did on 9 December. I think he was ill-advised, that he allowed the Treasury to run the negotiations and that the key decision was taken at a time—2.30 am—when no sane person should take a decision. None the less, the plain fact is that across the rest of the European Union there is a sense that Britain does not want to engage or be fully part of the EU. Last week, at a conference with the former French Defence Minister who negotiated the French side of the French-British defence treaty of 2010, I was surprised to hear his extraordinary, virulent attack on what one could call “Albion perfide” and how Britain was no longer a defence player with France, was not prepared to co-operate and was doing all it could, he said, to sabotage the good effects that the treaty would have. That is the reputation we have and that worries me.
	It also worries me to hear reports that one of the new intake on the Government Benches, whom I shall not name, said in a conference over the weekend that it would have been impossible to have been selected as a Conservative candidate in recent years—or, indeed, to be a Conservative MP—without showing the most strident Euroscepticism. [ Interruption. ] Well, if there is an exception that proves the rule and if the hon. Member for South
	Swindon (Mr Buckland) is about to make a pro-European speech I shall welcome that. None the less, that is the impression in this country.

Jacob Rees-Mogg: Will the right hon. Gentleman give way?

Denis MacShane: I have given way to two Europhobes, and I think three would be too many. It is a real worry when one party, the governing party of our country, is so monolithic—without internal debate, internal division or much internal discussion. [ Interruption. ] I look forward to hearing the speech of the hon. Member for North Wiltshire (Mr Gray) when he makes it.
	Then we have the fundamental problem that this Government and the ruling elites of the European Union are at one. Mr Sarkozy, Mrs Merkel, Mr Van Rompuy, Mr Barroso, Mr Rajoy, Mr Berlusconi and Mr Monti are all applying the 1930s austerity recession approach of making the poor pay and protecting the rich, which is the official policy of Her Majesty’s Government. I do not understand why there is any debate or division at all because for the first time those the other major European Union capitals and the Brussels institutions are on the same wavelength as Her Majesty’s Government. That is why there has to be some policy for growth, as people are pointing out again and again. Mrs Lagarde and Mr Soros have pointed that out and Mr Obama is seeking to achieve it.
	Government Members are correct to suggest that not only the European project but the entire western, democratic, liberal, rule-of-law, market economy project is under threat because of a generalised crisis based on inequality and the giving of too much power to money and too little power to people. The answer to that must be forms of solidarity. In 1942, at the height of the war, before we had won El Alamein or turned any corner, Winston Churchill sent a Cabinet memorandum to his colleagues saying, “Hard as it may be to say at this time, I think we should start considering the possibility of a council of Europe for after the war. We need to move towards a united states of Europe where all may travel and trade freely. I think we should conduct studies about how to have economic unity.” How extraordinary that at the height of the war—that was not the Zurich speech—Winston Churchill had that vision for what we have half-achieved, perhaps, in my lifetime and certainly in recent years.
	That is also why Mrs Thatcher, our then Prime Minister, after pushing through the Single European Act—the biggest transfer of sovereignty ever in British history—supported the arrival of Jacques Delors as President of the Commission. In 1984, our contribution to the EC budget was £656 million, but by 1990 she had increased it to £2.54 billion, quadrupling Britain’s solidarity budget to the then European Community. When tasked about that in the House of Commons, she said that of course we should help our poor friends in Portugal and Greece and also implicitly in Ireland and Spain. She was absolutely right. That is why we set up the International Monetary Fund after the war—precisely to deal with imbalances, crises, sudden recessions and, yes, Government incompetences that produce the kind of problems that Greece and some other countries are facing. It is quite preposterous to say that Britain will renege on its obligations to the IMF. I was happy to vote with the Government
	on this in the last Division and I certainly hope that Opposition Front Benchers are not going to play the Eurosceptic card on the IMF question if the matter comes back to the House.
	Finally, what do we have today? We have the surreal sight of a British Prime Minister in Davos not enjoying himself on the slopes but lecturing other European leaders on what they should do. What example is he citing—£1 trillion-worth of debt, recession economics, mounting unemployment or mounting poverty? There are mounting concerns all over the world, as the Chinese told the Chancellor of the Exchequer when he was in Beijing recently, about whether Britain is serious about marginalising itself in Europe and not helping to support Europeans with problems through the IMF. If it is, China cannot be interested in Britain because it is not interested in an isolated, protectionist Britain.
	We are taking huge risks with our economy and our nation by promoting these new, protectionist, isolationist politics. It is bad enough that we have to live with 1930s, Treasury-driven economics, but it will be a disaster if Britain continues to have the reputation it has sadly earned internationally as a country that wants to turn its back on Europe and that seriously believes its future could lie only in competing with Belgium for exports to India. This is a turning point for our nation. We either break out of this isolationist, protectionist logjam and work in solidarity with the countries of Europe that are growing and creating jobs and that have much better public finances than we have, or we pretend, in our own little sinking ship, that everything is for the best and this is the best of all possible worlds.

Several hon. Members: rose —

Lindsay Hoyle: Order. We are in a very serious position with a lot of Members wishing to speak. I am going to have reduce the time limit to five minutes, and even with that limit not all Members will get in if people intervene.

Martin Horwood: First, I congratulate the Backbench Business Committee on selecting this topic for debate, although on this occasion I agree with the hon. Member for Stone (Mr Cash) that it might have been better to debate this issue in Government time as it is critical for this country.
	While I am on the theme of congratulations, let me congratulate Sharon Bowles, MEP, on her recent re-election as chair of the economic and monetary affairs committee of the European Parliament. She was once voted one of the top 10 economic regulators in the world and she has presided over innovations such as the attempt to introduce regulation on bankers’ bonuses that would prevent someone like Fred the Shred from ever again walking away with a huge bonus from a failing bank. For that alone she deserves congratulation and I am pleased to see her retaining her place as one of the most influential Liberal Democrats in Europe.
	I repeat my earlier congratulations to the Deputy Prime Minister on convening the European Liberal leaders forum on issues relating specifically to this
	debate in London on 9 January. The forum agreed a programme of reform and competitiveness for Europe that would probably unite Conservative and Liberal Democrat Members of this House at least. That is a good example of how to build alliances across Europe and engage with Europe in a proactive way.
	It is good to see Britain at the table for the summit. Clearly, there is the main summit, which is supposed to be focusing on prosperity and growth, but there is also the rather important sideshow of the 26 making further progress towards the fiscal compact, which is critical for Britain, and I am very pleased that the Government have made sure that Britain is an active participant in the process, albeit with observer status. I know that Ministers have been active behind the scenes getting Britain involved in the process and making sure, for instance, that the fiscal compact treaty does not spill over into areas outside its proper remit, such as the construction of the single market. As Liberal Democrats have pointed out, that is one of the risks of our relatively isolated situation in Europe.

John Redwood: Does the hon. Gentleman think that at this point the power to fine Greece and then fining her would cut the Greek deficit?

Martin Horwood: I shall not be drawn into that. Critically, it is for the eurozone countries to address the crisis in the eurozone. The right hon. Gentleman highlights the important point that just by drawing up a treaty the eurozone countries do not solve some of the rather fundamental problems in the eurozone. In fact, the situation in Greece is becoming increasingly serious and it needs to be urgently addressed—that is even more the case now than in recent months.
	The importance of the main business of the summit must not be neglected. Britain’s re-engagement in European affairs is critical and it must be pushed forward. There have already been some successes. My right hon. Friend the Secretary of State for Business, Innovation and Skills helped to create the like-minded growth group, which has pushed forward ideas such as lifting onerous accounting rules from the smallest businesses in this country. I think the group has helped to create a shift in Commission attitudes on the smallest businesses to the point where it has committed to review all existing EU legislation to look for other opportunities to lift onerous regulation from such businesses and to screen new legislation to see whether, wherever possible, the smallest businesses can be excluded. That is exactly the kind of agenda we should be pushing in Europe.

Edward Leigh: I want to make an intervention that the hon. Gentleman and I can both agree with. Does he agree with the point I have been making consistently at business questions that this debate is so important that in future we should have it in Government time, for a whole afternoon, with the Foreign Secretary or the Prime Minister here so that we can ask them detailed questions?

Martin Horwood: I think that is right, although the point I am making is that the jobs and prosperity agenda should be the focus of such debates. If possible, we should get away from the obsession with structures and treaties. The British Government should be pushing
	the jobs and prosperity agenda at the summit. I have suggested some areas for deregulation and the European Liberal leaders forum drew up a long list of legislation that should be reviewed for possible reform. It included the working time regulations, the temporary agency workers directive, the control of vibration at work regulations, fixed-term employees regulations, part-time workers regulations, control of noise at work regulations, road transport working time regulations and the transnational information and consultation of employees regulations.

Bob Stewart: Scrap them.

Martin Horwood: I am not at all in favour of scrapping health and safety regulations or those designed to protect workers. They are extremely important. The point is not even necessarily to weaken health and safety and workers regulations in Europe, but to see whether they can be made more flexible and be applied more flexibly domestically. That is another area where the British agenda should be pushed.
	There are signs that European Governments are increasingly seeing things our way; it is not just the 15 members of the like-minded growth group. Italy has traditionally been more renowned for a protectionist stance in Europe and has at times had a less than impressive record on implementing single market legislation, but it is now actively implementing measures to liberalise great swathes of its economy and is actively pushing a single market agenda in Brussels that is directly comparable to ours. Spain, under the new Government led by Señor Rajoy, is also moving to undertake major structural reforms domestically and is shifting its position in Europe accordingly. Ministers must build on such possible alliances, which seem to be growing stronger all the time.
	There are other things that I probably do not have time to cover in great detail. In terms of promoting jobs and prosperity, it is important to push for the completion of the single market, particularly in the digital and services sectors. External trade is equally important. This morning, I was in a Committee that voted on a new framework agreement that included free trade with South Korea. It could soon be extended to Ukraine and possibly a range of other countries. That is the kind of thing that will drive jobs and prosperity in Europe, not an overly obsessive attitude to EU treaties and institutions.

Several hon. Members: rose —

Lindsay Hoyle: I call Chris Bryant.

Chris Bryant: Thank you very much, Mr Deputy Speaker. I thought you were about to call somebody more senior.
	I agree with the hon. Members who said it is a shame that the debate has had to rely on the kindness of the Backbench Business Committee. When I was Minister for Europe it was an important part of our mandate that before we went to a European Council we had to turn up in the House, in Government time, to answer a debate, even if it meant inconvenience for Ministers. It is a terrible shame that the Foreign Secretary is not here. I respect enormously the Under-Secretary of State for
	Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt), and I saw him assert that he is pro-European, which is great, but it is wrong that the Foreign Secretary is not with us.
	I want to raise two issues that are not on the Council agenda but should be. The first is Cyprus. For far too long, the European Union has had within it a divided country, with a divided capital city. It affects many people in the UK; there are strong Cypriot communities in Cardiff and elsewhere in the country. The real problems faced by the Cypriot economy could be resolved easily if one were to overcome the political problems, because Turkey is the fastest growing economy on the borders of Europe. I hope that the Foreign Secretary and the Prime Minister will make it clear that we want progress in Cyprus, and this is no bad time for it, when Greece is trying to resolve some of its own economic problems.
	The other foreign policy issue that should be on the agenda is Russia. The elections just before Christmas were a complete and utter farce. In a vast majority of areas, they were corrupt, as every organisation sent to monitor the elections made clear. Absolutely nothing has been done. There have been many warm words from Mr Putin and Mr Medvedev, yet there has been no action. We still have no resolution of the cases of Mr Khodorkovsky and Mr Platon Lebedev, both of whom are purely prisoners of conscience, and not tax evaders. There is also the case of Sergei Magnitsky who worked for a British company.
	The British Government should make it absolutely clear that Europe will manage to improve its business with Russia only when corruption is rooted out in Russia. That will not happen if country after country tries to make its own sordid little deals; it will only happen if the whole of the European Union acts in concert and in union to make it clear that Russia has to clean up its act.
	I believe in more Europe rather than less Europe. I say that unambiguously. I said to the hon. Member for Folkestone and Hythe (Damian Collins) that enforced audit would have meant that we did not get into the hole we are in, and there are other areas. The United Kingdom was wrong when we decided to go our own way, with Ireland, saying that there were to be no transitional arrangements with regard to people from the new member states working in the UK. One of the reasons why so many people came here was that every other country in the EU was going down a different route. It would have made far more sense if there had been a single European decision on that policy area.

Denis MacShane: At a conference last week, the German film-maker, Volker Schlöndorff said how much he wished that 1 million-plus Poles had gone to Germany and learned German and then gone home imbued with German ideas, language and contacts to build a closer relationship between Poland and Germany. We have made 1 million-plus Polish friends because of our policy; it has been good for Poland and good for us.

Chris Bryant: I hope we have made a lot of Polish friends. When I was a curate in High Wycombe, we had a long-standing Polish community there, many of whom fled German ideas about Polish people from the 1930s and 1940s. But I still think it would have been better for us if there had been a whole-European decision. We
	underestimated the number of Polish people who would come to the United Kingdom and that was a mistake for our economy.
	Anyone from Brazil, China, Russia or India—or, for that matter, Mexico or Turkey—would say that they are all interested in trying to do business with one set of rules in Europe, not 27, on the size of plugs, on electricity, and on many other elements. I believe it is in our interests that we should strive ever more for the extension of the single market, so that we can do better out of the growing economies of the world; otherwise, our future will be on the sidelines, not at the heart, of the world’s history.
	I have anxieties about the Government’s attitude on these issues. I know the Prime Minister tries to show a little bit of leg to Conservative Back Benchers and then to his European allies. There is a little bit of leg being shown here, there and everywhere. But the truth is that we need British businesses to be far more courageous about doing business in Europe; they should not just sally forth and speak louder—shout in more grammatically incorrect English than they would to their children—in the belief that they will get a contract. We must have more ambition when it comes to Europe.
	I would say to those who said earlier that they praised the Prime Minister before Christmas that—leaving aside my opinion that it is giving the Prime Minister that dangerous element of messianism, which is always worrying for a Prime Minister—the child who has stormed off to his bedroom is rarely the person in the family who wins the argument.

John Redwood: I rise to support the Prime Minister. I think he had no alternative but to say no to a very unsatisfactory deal and to a totally inappropriate proposed measure at that Council. Nor do I think he has lost Britain influence by doing it; I think he has won Britain influence by doing it. We learned subsequently that several non-euro member states could not go along with the draft any more than the United Kingdom could. We also learned subsequently that France, Germany and others are now beating a path to the United Kingdom Foreign Office door, trying to get us back on board, trying to woo us because we had the courage to say no.
	We meet today because we wish to influence our Government in what they are doing at yet another important European summit. The European Central Bank has bought the Europeans a little time by printing and lending unprecedented sums of money to a very weak European banking system, but those meeting would be wise to understand that that has only bought a little time; it has not solved the underlying problem. Indeed, there are two underlying problems. There is the inability of the southern countries to compete with Germany at the fixed exchange rate within the euro, making them poor and giving them large balance of payments deficits which they have trouble financing; and there is the big problem of the southern states’ debt getting ever bigger. Because their economies are malfunctioning, because so many people are out of work and because they cannot price themselves back
	into jobs, their debts and deficits go on soaring, and now in three cases member states of the euro area cannot finance those deficits in the normal way and have to be on life support from the EU and the IMF.

Martin Horwood: On the subject of the right hon. Gentleman’s support for the Prime Minister, will he join me in welcoming the Prime Minister’s remarks this morning in Davos, when he said,
	“Let me be clear. To those who think that not signing the treaty means Britain is somehow walking away from Europe let me tell you, nothing could be further from the truth”?

John Redwood: Of course the Prime Minister is right that we are in the European Union and all the time we remain in it we have to use our membership as best we can to protect the interests of the British people.
	The main purpose of the summit must be to try to deliver greater prosperity and some growth and some hope to the peoples of Europe, because their hope has been depressed and their prosperity is being destroyed by a system that cannot conceivably work. The euro area is now locked into a system of mutually assured deflation, a mad policy, and the more those countries’ economies decline, the more the deficits go up, the more they have to cut. They cannot get themselves out by monetary means, in the way that the United Kingdom and the United States can, by creating more money in their system, and they cannot get out by having a competitive exchange rate.

Mike Gapes: rose —

John Redwood: I am sure that was the point that the hon. Gentleman wanted to make.

Mike Gapes: If the right hon. Gentleman is so against the austerity deflation policies in the eurozone, why is he supporting the austerity policies of his own Government?

John Redwood: Because, as I just explained, it is totally different if a country has its own currency and can use monetary mechanisms to try and grow its way out of the problems, and can establish an exchange rate that allows it to export its way out of the problems, which is exactly what these countries have to do, and are unable to do because they are locked in.

Denis MacShane: rose —

John Redwood: I have no more injury time available, so I need to develop my argument rapidly.
	If those countries are to have some hope of prosperity, they need to solve the two underlying problems. It is obvious to most external observers that the way to solve the problem of competitiveness quickly is to devalue. Normally, an IMF programme for a country in trouble not only asks it to cut its budget deficit and reduce its excess public spending, but suggests that it devalue its currency and move to a looser monetary policy domestically, so that there can be private sector-led growth, export-led growth—the kind of thing it needs to get out of its disastrous position. That is exactly what those countries are unable to do. That is why the IMF should not lend a country like Greece a single euro or a single dollar. Greece is to the euro area as California is to the dollar
	area: it is not an independent sovereign state, and it cannot do two of the three things that a country needs to do to get back into growth and prosperity, because it cannot devalue and it cannot create enough credit and money within its own system.
	We need to give honest advice to our partners and colleagues in the eurozone, around the European conference table—in private, not in public—that the only way forward, the only way to resolve the crisis for those countries that can no longer borrow in the marketplace at sensible rates of interest, is to have an orderly way of letting them out as quickly as possible, so that they can re-establish their own currency, their own looser and appropriate monetary policy and their own banking policy, and offer some hope to their subject peoples.
	I am very worried that this is not only an economic crisis, this is not only a banking crisis, this is not only a currency crisis, but it is also now a crisis of democracy. The challenge, in countries such as Greece and Spain, is how the Governments manage to get buy-in to the policy of deflation, and cuts with everything, that is the only offering from the euro scheme and the euro system. We see in some of these countries now that the electorates do not choose the Government; the European Union’s senior players choose the Government. We see in some of these countries that the electorate change the Government but they do not change the policy. The new Government have to pledge to follow exactly the same policy, which does not work, in order to get elected and to be acceptable to the European Union, in order to carry on drawing down the subsidies and loans from within the European Union that have to be on offer to try to make the system operate to some extent.
	I hope that the British Government will adopt the following position. I hope that they will say in public, whenever asked about the euro, that the British Government have no intention of providing any running commentary on the euro whatever, and have no intention of saying anything that makes the position of the euro worse, but will always give good, strong, independent advice in private. That should be the public position. It is too dangerous to say things. Most of the things that politicians say about bond markets and currency crises make the position worse, so the United Kingdom would be well advised to have a simple formula, which all Ministers use, that we are providing no commentary on the euro and we wish the euro members well in sorting it all out.
	In private, we are important allies and partners of the euro area and the British Government need to give honest advice to try to get our continent out of this mess. I do not believe there is a single fix that can solve that problem for all the countries currently in the euro. Many of them went into the euro with inflation rates that were too high, with state deficits and debts that were too high, and with currencies that were not in line with the German currency. It was a huge error. The founders of the euro knew that there had to be very strict requirements; they broke them from day one.
	It will not solve the problem to sign up to some new constitutional pact that says that a country down on its luck, unable to borrow money, running out of cash, will be fined. Who will pay the fine? The answer is that the fine would have to be lent to the country in trouble by the very people who are fining it. It is so preposterous that I find it very difficult to believe that serious people can sit round a table, negotiating such an instrument.
	They should cast aside the draft instrument. It is irrelevant; it cannot work. They should sit down in private and work out how to get non-competitive countries out of this mess before even more damage is done to their economies and their democracies.

Keith Vaz: It is always a pleasure to follow the right hon. Member for Wokingham (Mr Redwood) who, in his 25 years in this House, has always been strong and consistent in his criticisms of the European Union.
	I add my voice to all those who have spoken in favour of there always being a senior Minister at the Dispatch Box to introduce a debate such as this. When the right hon. Gentleman was a Secretary of State, the Minister for Europe in that Government wound up the debate, which would have been started by the Foreign Secretary, and when I and then my hon. Friend the Member for Rhondda (Chris Bryant) served as Minister for Europe, this debate was considered an important opportunity—perhaps the only opportunity—for Back Benchers to influence the Government as the Prime Minister, the Foreign Secretary and the Minister for Europe went to European summits. I therefore hope the first message the Government will take from the debate is the unity of opinion in the House—I have not heard a single opposing voice—that this should be a debate in Government time, with Members not limited to five minutes in which to state their views.
	My second point is to ask the Minister to tell us when he winds up what has happened to the Lisbon strategy. It was agreed at the Lisbon summit in 2000 as part of the Lisbon agenda, developed over 10 years and adopted very recently with a set of five headline benchmarks. Does that strategy still exist, given the eurozone crisis? Are the Government still committed to delivering in those five areas—employment, investment in research and development, education, poverty and greenhouse gas emissions—which were set at the first ever summit to benchmark EU economic policy? Are we on track to do so? I get the feeling from discussions that I have had and from the responses to questions I put to Ministers, including the Prime Minister when he returned from the last summit, that although there is an intention to support the Lisbon strategy, it is certainly not high up on the Government’s agenda. I think that, given that this informal meeting is about growth and jobs, it is extremely important that we have benchmarks for the EU.
	My third point is about EU enlargement, of which I am a great supporter. It has been of great benefit not only to the eastern European countries that have joined but to our country in particular. Croatia is due to join in July 2013. The EU has given Croatia €150 million to support its entry, and it will give another €150 million this year and €95 million next year. Will the Minister tell us whether that is the final figure; whether there will be any increase or, because of the euro crisis, any decrease in the amount we give Croatia; and whether that will continue after Croatia joins the EU?
	This is a very short debate and we have to make very short speeches, but if those three points can be conveyed to the Prime Minister when he attends the summit and if the Minister can indicate the Government’s position when he winds up, I am happy to conclude my remarks now.

Several hon. Members: rose —

Lindsay Hoyle: Before calling the next speaker, let me say that, ideally, I will call the first Front-Bench speaker at 28 minutes past 1. I call Bernard Jenkin.

Bernard Jenkin: This debate is being conducted between some right hon. and hon. Members with an extraordinary air of complacency and myopia. The European Union is on the edge of the most appalling crisis—a self-inflicted crisis that many of us predicted when the euro was first conceived in the early 1990s and is now being fuelled by blindness and denial. The fundamental problem is that the euro cannot work—it cannot succeed. There are fundamental structural flaws that are destined to cause the euro eventually to fly apart into separate currencies. I do not want the euro to fail, but the fact remains that the crisis will go on and on until it does fail, so we should start to ask ourselves whether it is, in fact, in our interests that it be resolved quickly and in an orderly fashion, instead of waiting for the markets to do their work.
	The fundamental structural problem is that the different national components of the euro represent very different economies, with different surpluses and deficits. The 2010 figures for trade in goods in the eurozone, provided by the Library, show that Germany has a surplus in exports to the other eurostates of €43.4 billion. Other countries have very large deficits: France’s is 4%, Greece’s 6% and Portugal’s 9%. Unless there is a system of fiscal transfers permanently operating to compensate for those surpluses and deficits, the European economies will become ever more out of balance. The debt problem has been greatly exacerbated by artificially low interest rates in countries that were used to much higher interest rates and therefore borrowed vast sums.

Edward Leigh: Is it in our interests that the other countries succeed in creating fiscal and monetary union? We will be excluded from a massive monetary union, which historically—for centuries—we have tried to avoid. Or is it in our interests that the euro gradually breaks up in a reasonably orderly way?

Bernard Jenkin: I do not subscribe to the view that British foreign policy should be constantly to try to divide and rule on the continent. Actually, I think it would be in our interests if the euro succeeded with a democratic settlement in the European Union, but for the euro to succeed with 17 nations the institutions would be required to take on much more power, to accumulate much more taxation and to distribute money much more than they do now, and I put it to the House that because there is a democratic deficit in the EU, which everyone acknowledges, the institutions lack the legitimacy and the authority to be able to impose their will across the democratic nations of the EU. There is a fundamental lack of consent to what would be required to impose the necessary discipline.
	The problem with the fiscal union treaty is that it is a case of Germany trying to write German rules for the whole eurozone. That will not work—it cannot be sustained—and the result will be the break-up of the euro, so we had better start planning for that eventuality
	now. There are three things we should do, the first of which is to have a plan and not pretend that a break-up will not happen. I accept the suggestion made by my right hon. Friend the Member for Wokingham (Mr Redwood) that the plan should be made in secret, but there should be a plan and the IMF should be its guardian. Secondly, the plan should be clear on what liabilities will be denominated in what currencies as each country comes out of the euro—easy for sovereign debt and very complicated for commercial paper, but it has to be done. Thirdly, the G20 must be ready to provide the liquidity needed to deal with the defaults that will occur as each country comes out of the euro—massive defaults that will require massive central Government printing of money to recapitalise the European banking system.
	That can be done and it has to be done. My right hon. Friend the Prime Minister was absolutely right to veto the treaty on 9 December. He knows there can be no going back on that decision, because to do so would leave him a position where he might as well have not vetoed the treaty, and then where would we be?

Emma Reynolds: The debate comes at a crucial time for the eurozone and the wider European Union. Last month’s European Council could and should have taken the vital decisions needed to stabilise the eurozone and boost growth and jobs in the EU, but it failed to do so. Monday’s European Council is a vital chance to make up for previous lost opportunities, but I fear that the Prime Minister’s diminished position in Europe has jeopardised the Government’s ability to achieve and influence that. His walk-out at the previous European Council was a spectacular failure to engage with our European partners. We have a world-class diplomatic service, but the Prime Minister refused to use the talent, professionalism and experience of the Foreign Office and opted instead to let the Treasury run our foreign policy. He decided that keeping his Back Benchers happy was more important than helping our main export market resolve the eurozone crisis. He in fact followed the advice of the Foreign Secretary who, according to various reports, before the last European Council told him:
	“If it is a choice between keeping the euro together or keeping the Conservative party together, it is in the national interest to keep the Conservative party together.”
	That is the only thing that the Prime Minister did achieve, because he did not stop anything happening. His diplomatic defeatism was accurately summed up by the Deputy Prime Minister earlier this month, when he said:
	“The language gets confusing. Veto suggests something was stopped. It was not stopped.”
	I could not agree more.

Martin Horwood: The hon. Lady makes some of the points that I made several months ago and that other hon. Members sympathetic to the pro-European cause made at the time of the summit. Surely we have now moved on. The Prime Minister, in his remarks today at Davos, quite clearly stated;
	“It fundamentally reflects our national interest to be part of the single market on our doorstep and we have intention of walking away. So let me be clear: we want Europe to be a success.”
	The process of re-engagement is under way.

Emma Reynolds: The process of re-engagement might be under way, but the Prime Minister’s decision to walk out of a summit that did not have a text to it has undermined our influence in the EU. His spectacular mishandling bought him short-term political respite from the pressure of his Back Benchers, but they will always want more, and we heard that in today’s debate.

Denis MacShane: May I pray in aid the Deputy Prime Minister, who said that the Conservative party in the European Parliament is now allied with “nutters, anti-Semites and homophobes”? The right hon. Gentleman has not resiled from that. That is walking away from Europe. As long as the Conservative party is in alliance with those weirdos, it loses a good part of the political traction that it should have in Europe.

Emma Reynolds: My right hon. Friend makes a valid point. If the Prime Minister had not pulled his MEPs from the mainstream centre right in the European Parliament when he was Leader of the Opposition, he would have found that he had much more influence before the summit, because he would have been in Marseille for the European People’s party meeting in preparation for the European Council summit.
	It is of real concern to the Opposition that by isolating the UK the Government have lost influence with our European partners and could lose influence over the single market. Deeper fiscal integration by the eurozone countries does not necessarily lead to the development of separate trade policies or separate decisions on the single market, but that could come about if the UK continues to lose influence.
	I understand that the Polish Government are now seeking to secure a seat at the frequent eurozone summits—a logical negotiating position. If they are successful, they would then have a voice, even if they did not have vote, at eurozone summits. As it stands, our Government will be barred from such meetings, leaving the UK without a vote and without a voice, unable to guard against eurozone Heads of State and Government straying into areas of decision making that are relevant to the EU of 27.

John Redwood: Will the hon. Lady bring us up to date with Labour’s thinking on any vote that we might face in this House on money for the IMF to lend on to euroland countries in trouble?

Emma Reynolds: As the right hon. Gentleman knows, the Opposition voted against the IMF contribution last time. I think that he might have been in the Lobby with us. We think that the European central bank should be the lender of last resort and that IMF money should concentrate on countries with severe economic problems outside the eurozone.
	The Prime Minister’s walk-out also resulted in risks to foreign direct investment. Businesses investing from the US and Asia have chosen the UK for their operations because it gives them access to European markets. But if the UK’s position in the single market were in doubt, foreign direct investment would also be under threat. Moreover, as the Deputy Prime Minister rightly said on the Sunday after the December Council, if the UK stands tall in Brussels, we stand tall in Washington. It is also true that if we stand tall in Brussels, we also stand
	tall in Beijing and the other major emerging economies. With economic power moving south and east, to countries the size of continents, it is nostalgic longing for the empire to think that the UK can go it alone. It was the Minister for Europe, in a recent Opposition day debate, who said that
	“without the size of the EU behind us, the United Kingdom on its own is unlikely to be able to secure the same deep and ambitious free trade deals with other regions or trading countries around the world.”—[Official Report, 13 December 2011; Vol. 537, c. 724.]

William Cash: Will the hon. Lady give way?

Emma Reynolds: I will in a minute.
	The task of Monday’s European Council is both urgent and long term—urgent in that it must address the lack of confidence in European markets, but alongside that the EU must enhance the resilience and capacity of the single market to get back to a sustainable footing in the long term.
	We welcome the intention to focus on jobs and growth on Monday, as well as agreeing a fiscal compact. We would prefer the Government, rather than merely commentating on the outcome of the European Council, to be setting the agenda. We hope that their failure in diplomacy will not involve a failure of policy and economics. After all, in the coalition agreement, the Tories and the Liberal Democrats stated that Britain should play a leading role in the EU. The Prime Minister clearly did not have that in mind in December.

William Cash: Will the hon. Lady give way?

Emma Reynolds: When the Minister replies, will he clarify one issue? The Deputy Prime Minister has been organising his own meetings, and in some cases he seems to be running his own parallel foreign policy. While it is right for the Government to be building bridges, it is disappointing that the Deputy Prime Minister has thus far chosen not to report the outcome of the meetings to Parliament. Would the Minister therefore confirm whether the Deputy Prime Minister was speaking for the Government when, at the recent European Liberal forum, he said:
	“We believe—
	the treaty—
	“should, over time, be folded into the existing EU treaties so you don’t get a permanent two parallel treaties working separately from each other.”?
	At next Monday’s European Council, the British Government at least have observer status, but that is thanks to Chancellor Merkel and Prime Minister Monti, who want the UK back in the room. They see the UK as a leading member state, advocating an extension of the internal market. It is testament to past British diplomacy and previous Governments that many other member states share the view that, with Britain isolated and excluded from these talks, the push for further liberalisation and reform becomes harder.

William Cash: Will the hon. Lady give way?

Emma Reynolds: The hon. Gentleman is frustrated, but he will understand that because interventions eat into my time I will continue.
	Britain’s standing in the world—economically and politically—must be reinforced and strengthened, not weakened. The resolution of the eurozone crisis is manifestly in our national interest. It is also in the national interest for the UK to be at the heart of the EU, a large member state with an open economy, arguing for and securing an extension of the single market, arguing for and securing reform of the EU. The UK now needs to regain that position and start rebuilding bridges.
	On Monday the Prime Minister should seek to undo the damage caused by what he did in December, diminishing our standing in Europe and the world. It might not please his Back Benchers, but it would be of benefit to businesses, jobs and employees throughout the country. The Prime Minister must start to put the national interest before his party’s interest.

Alistair Burt: I thank the hon. Member for Wolverhampton North East (Emma Reynolds) for her remarks and all colleagues for taking part in this important debate. I thank the Backbench Business Committee for finding the time for this debate on next Monday’s informal Council. We know that there are many calls on the time it has available to allocate, but as it now holds the time previously assigned for European affairs debates, I am pleased that it found time for this debate.

Edward Leigh: It is fantastic that my hon. Friend is here and we greatly respect him, but will he take back to the Foreign Secretary the clearly expressed wish of Members on both sides of the House that we should have a full afternoon of debate in which he is present before any future European summits?

Alistair Burt: I thank my hon. Friend for his generous remarks. As he knows, occasionally colleagues cannot be where they would like to be because of other business, but I have heard what colleagues have said. My hon. Friend the Member for Gainsborough (Mr Leigh) expresses an interest in how the House scrutinises European business, and I will certainly take back to the Minister for Europe and the Foreign Secretary what colleagues have said. I would like to underline the effort and valuable work of my hon. Friend the Member for Stone (Mr Cash) and the European Scrutiny Committee.

Chris Bryant: Will the Minister give way?

Alistair Burt: No, because I might take another intervention on something else. Time is limited and I cannot do justice to everyone.
	On Tuesday the International Monetary Fund published its world economic outlook. It revised down its global growth forecasts, mainly because of developments in the eurozone. It now expects the eurozone to enter a recession in 2012, with GDP falling by 0.5%. Those of us outside the eurozone are not immune from that. The ongoing sovereign debt crisis is having a chilling effect on our economy, too. Like my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), I do not want to see the euro fail.
	The eurozone needs to find a credible and sustainable solution to the debt crisis. Beyond that, there is a challenge for all 27 EU member states to release the brakes on growth to generate wealth, jobs and enterprise, and that was very much the focus of the speech made by my hon. Friend the Member for Folkestone and Hythe (Damian Collins).

Robert Buckland: On the point of improved opportunities for the single market, will my hon. Friend ensure that the Government take a clear message to the Council that work on improved tariff reform between the UK and Japan is vital for the British motor industry, particularly Honda in Swindon, which is a Japanese company based in the UK?

Alistair Burt: I can make no stronger a case for Honda in Swindon than my hon. Friend has made. He is absolutely right to focus on competitiveness, growth and the agenda that my right hon. Friend the Foreign Secretary will take forward there. I appreciate his comments. This informal European Council will rightly focus on growth and competitiveness, and it is vital that it makes progress ahead of the March European Council, which will also focus on growth.
	The UK has played, and will continue to play, a strong and positive role in the EU as we and our European partners face the most pressing task of tackling our shared economic challenges. We are leading the arguments for growth and others continue to look to us for leadership. We have spearheaded the work of 16 member states, some inside the eurozone and some outside, in pressing for reforms to support growth. Together we have over the past year secured positive conclusions from European Councils that reflect our priorities. Action is now being taken, as shown by the Commission agreeing to exempt micro-businesses from EU regulation unless a clear case can be made for their inclusion.
	Our diplomatic efforts to build alliances for growth continue in the European Council. The UK has agreed growth priorities for the informal Council with the Netherlands, Sweden, Finland, Ireland and Estonia, which will cover: completing the single market; reducing the regulatory burden; what member states should do to improve labour markets; and reaffirming the importance of the external dimension of the single market.
	My right hon. Friend the Prime Minister also spoke to the German Chancellor, Angela Merkel, at the weekend to discuss our shared priorities. They agreed that the steps we should take to strengthen growth and fight unemployment, particularly youth unemployment, in Europe will form the focus of the informal Council on Monday. A number of right hon. and hon. Members spoke about our engagement with Europe. The Prime Minister was very clear today when talking about engagement, as my hon. Friend the Member for Cheltenham (Martin Horwood) made clear. In response to the question the right hon. Member for Leicester East (Keith Vaz) asked on Lisbon, I can tell him that the Prime Minister today said in Davos:
	“For all the talk, the Lisbon Strategy has failed to deliver the structural reforms we need.”
	It has largely been replaced by Europe 2020, which includes the sorts of benchmark the right hon. Gentleman referred to. The fact remains that we need to be bolder
	in the structural reforms we pursue to promote growth. The Prime Minister also said:
	“Britain has been arguing for a pro-business agenda in Europe… Over the last year we have spearheaded work with 15 other member states across the EU... This weekend Chancellor Merkel joined me in calling for a package of deregulation and liberalisation policies… But we need to be bolder still. Here’s the checklist: all proposed EU measures tested for their impact on growth; a target to reduce the overall burden of EU regulation; and a new proportionality test to prevent needless barriers to trade in services and slash the number of regulated professions in Europe. Together with our international partners, we also need to take decisive action to get trade moving.”
	That is what the EU needs, and that is what the informal Council will concentrate on.

William Cash: Will my hon. Friend give way?

Alistair Burt: I have only three minutes remaining, but I will take one further intervention, because my hon. Friend deserves it; we have discussed these matters on many occasions.

William Cash: Did the Prime Minister agree with Angela Merkel when she said:
	“We will have to get used to the fact that the European Commission… will become more and more like a government”?

Alistair Burt: Alas, I have not had the opportunity to test that quote with my right hon. Friend the Prime Minister, but I will do so as soon as I have the opportunity.
	A number of Members, including the hon. Members for Ilford South (Mike Gapes), for Rhondda (Chris Bryant) and for Wolverhampton North East (Emma Reynolds) and the right hon. Member for Rotherham (Mr MacShane), spoke about engagement in Europe. We are engaged. As my hon. Friend the Member for Cheltenham said, the Deputy Prime Minister hosted a meeting of various liberal European Prime Ministers, Commissioners, Deputy Prime Ministers and Foreign Ministers on 9 January to set out the British vision of greater competitiveness and growth across the European Union, because austerity alone will not fix the eurozone
	or the European economies. We have to combine fiscal discipline with a plan for more jobs and more growth, and the Deputy Prime Minister was right to say it.
	As for lack of engagement and isolation, I am astonished that the presumption of the hon. Member for Wolverhampton North East in bringing to the House a challenge to the Government when the Opposition’s position is distinctly unclear. We will continue to work hard with our many allies in Europe to advance our interests. It is not isolation; it is defending the national interest. We differ from others in that we are not in the euro and do not want to join. We will not proceed with plans for fiscal consolidation if we feel that we are not protected. We will continue to work hard to advance our interests. One thing that would have made Britain weaker was coming home with a treaty change and no safeguards.
	If the Opposition want to criticise the Government’s policy, they need to say what they would have done in office, but last month in the space of 10 days they had three different positions: first they refused to say what they would do, then they said that they would have vetoed the treaty, and then they said they would not have done so. They would have some credibility if they had a policy, and a bit of consistency would help.
	This useful debate has concentrated not only on engagement and the like, but on the prospects for next Monday. The UK has an ambitious agenda for growth in Europe, and it is one we share with many like-minded states across Europe. It is also an agenda on which we have made much progress already throughout the last year. We will continue to ensure that we put our national interests first and to have a policy from a united party in relation to the UK interests in Europe. We will continue to look for partners who will share that interest, and at the moment the EU is calling for growth, competitiveness and more jobs.
	One and a half hours having elapsed since the commencement of proceedings, the motion lapsed (Standing Order No.24).

Strategic Defence and Security Review

[Relevant documents:  First Report from the Defence Committee, The Strategic Defence and Security Review, HC 345, and the Government response, HC 638; and Sixth Report from the Defence Committee, The Strategic Defence and Security Review and the National Security Strategy, HC 761, and the Government response, HC 1639. ]

James Arbuthnot: I beg to move,
	That this House has considered the matter of progress on defence reform and the Strategic Defence and Security Review.
	I begin by welcoming the Secretary of State to the first full debate on defence in which he has taken part as Secretary of State. In the short couple of months in which he has been in post, he has really impressed the Defence Committee, and me. I have formed an extremely high opinion of him as Secretary of State. I am perfectly well aware that he will be thinking at the moment, “If only I could say the same of him,” but I hope that during the course of the debate we will get to the bottom of some of the issues we face. I also welcome the very fact that we are having the debate, and thank the Backbench Business Committee for at last finding a day on which we can discuss one of the most important issues in the world, and the most important issue of government.

James Gray: I, too, welcome the fact that the Backbench Business Committee has found time for this debate, but does my right hon. Friend not agree that defence should be a matter not for that Committee but for Her Majesty’s Government? This issue should be debated in Government time, not in Backbench Business Committee time.

James Arbuthnot: I would hope that this issue could be debated both in Back-Bench time and in Government time, because of its central importance, but as the Committee will see, the pressure on speaking opportunities this afternoon is heavy, so there is a time limit even though there will not be a vote at the end. I hope that that means that we will have further such debates.

Andrew Murrison: I accept everything that my right hon. Friend says about the pressure on time today, but does he observe that very little of that pressure is likely to come from Opposition Members, among whom there is a desultory turnout for such an important debate?

James Arbuthnot: At the moment the Opposition Benches do look rather empty, but let us hope that things will change.
	I should like to examine what is different about the United Kingdom. Our role in the world is unlike that of any other. The quality of our armed forces is, I believe, second to none, and that comes mostly from the training that they receive, from the structure of the armed forces and from the fact that they work together in regiments and in units to fight, not actually for their country, and
	certainly not to fight for their politicians, but to fight for each other—so we must be very careful indeed before we tamper with that structure.
	We should give thanks, however, to those men and women who lay their lives on the line and are prepared to sacrifice everything they have and everything they are in defence of this country. We are incredibly well served. We need to treat those people well, and I shall return to that point later in my speech, although I shall try not to take too long, as there is such pressure on time.
	The UK is different, too, because we are prepared to put our people where our rhetoric is: we are prepared to fight when force is needed. In spite of that, we are seen as a force for good, and in that respect I draw one comparison with one other country: Germany. Germany is doing really valuable work in Afghanistan, and it is led by German politicians often in defiance, almost, of the beliefs and values that, largely at our instigation, have grown up in Germany since the second world war. When one goes to Germany and asks, “Why can you not contribute more to NATO operations?” one finds that they say, “Well, you’ve always been telling us not to fight; you’ve got to make your minds up.” We are gradually getting there, and in Afghanistan we are seeing a really valuable contribution.
	I want, nevertheless, to read out a quotation from May 2010:
	“In my estimation…we—including society as a whole—are coming to the general understanding that, given this strong focus and corresponding dependency on exports, a country of our size needs to be aware that where called for or in an emergency, military deployment, too, is necessary if we are to protect our interests such as ensuring free trade routes or preventing regional instabilities which are also certain to negatively impact our ability to safeguard trade, jobs and income. All of this should be discussed and I think the path we are on is not so bad.”
	That is not an unexceptionable thing to say, but it was said by the President of Germany in an interview in May 2010, and because of those words he was forced to resign as President. That is a real issue. So Britain is one of the few countries in Europe which is really prepared to put its forces where its rhetoric is, and we should be praised for that.
	We have a history of involvement with most of the world. At one stage or another we have owned most of it, and many borders over which we now see disputes are probably our fault. Nevertheless, as a result of those historical issues we have, throughout the world, relationships that we need to preserve and that those parts of the world want us to preserve. We also have a history that is borne out of our prosperity, and our armed forces have a real role to play in that.
	Owing to all that uniqueness, that difference between the United Kingdom and others, our alliances and our position in huge alliances, we have huge ambitions to match that history, but what we do not have any more, to match our lofty ambitions, is the resources required to back them up. There is a clear contradiction between what the Government said in the strategic defence and security review about rejecting the shrinkage of UK influence throughout the world, and the reduction of the money that we spend on the Ministry of Defence and the Foreign and Commonwealth Office. We may well have to reduce the money that we spend on those Departments, but our ambitions should be reduced to match it. We now spend less on the Foreign Office than on the winter fuel allowance. That is a striking statistic.
	I have no objection to this Government and this country being committed to hitting the target of spending 0.7% of gross domestic product on international development; I am proud, actually, of that ambition, that aim and that goal, because our role of defending our interests extends to, for example, preserving the stability of countries such as Pakistan and Afghanistan, and our international aid effort is important in that. In that respect, however, I ask one brief question: why is the stabilisation unit being withdrawn from Afghanistan in 2014? Although I took some time to come around to any agreement with the idea, I fully understand that our combat troops should be removed from Afghanistan by the end of 2014, but the stabilisation unit is precisely the reverse of combat troops. The current expectation is that 25% should be withdrawn this year, 25% next year and the rest by the end of 2014. The Government should reconsider that.
	Equally, I have no objection to defence having to bear its brunt of deficit reduction. When, as in the past day or two, we hear that our debts are now £1 trillion, we have no choice, and let us remember that the greatest weapon—the greatest defence—a country can have is a strong economy. Indeed, we should not object to the fact that defence has to play its part in trying to produce that strong economy, but to pretend that while we reduce our defence resources we can be as strong in terms of our armed forces as we were before is wrong.
	On the Defence Committee’s role, I return to the issue of treating the armed forces fairly, touching briefly on the little local difficulty that was produced by our report this week on the Ministry of Defence’s annual report and accounts. It is of course regrettable that for five years running the MOD’s report and accounts have been qualified, and it would be nice to have a true and fair view of what it has to spend and what its assets are, but the point that has obviously hit the headlines is the impression of unfairness created by compulsory redundancies among the armed forces but not among civilian personnel.
	We have asked, therefore, for a compelling and persuasive reason why the one should be so and the other should not. If the answer is, “So many redundancies have been applied for in the civilian services of the Ministry of Defence,” perhaps that is because morale in that area is so low. If that is the answer, it is an issue that my right hon. Friend the Secretary of State really needs to address. If the answer is, as the permanent secretary told us, that civilians are flexibly employable whereas the military is not, that too is something that the Secretary of State needs to address. However, I do not believe that to be the right answer. I have heard the Secretary of State ask what else we could have done. I am afraid that four reasons for the disparity have now been explained to the Defence Committee, and without knowing the real reasons we cannot help to find an answer. We have, at least, highlighted the issue.
	The relationship between my right hon. Friend and me, and the Defence Committee and the Ministry, is not cosy—quite right, too; it should not be. But neither should it be a relationship of antagonism and a feeling of “They are the enemy”. We do not regard the Ministry of Defence as the enemy, and we hope that we can move to a position in which the Ministry does not regard us as the enemy.

Philip Hammond: rose—

James Arbuthnot: I can quite see my right hon. Friend answering, “Well, this is a funny way to go about it,” but I will give way to him none the less.

Philip Hammond: I am tempted to say that it is even a grotesque way, Mr Deputy Speaker. In the spirit of my right hon. Friend’s remarks, perhaps I can try to help him. I understand his concern about the voluntary and compulsory redundancy numbers, but the simple fact is that we have set out a trajectory of headcount reduction among the civilian employees of the MOD and among the armed forces. At each tranche we have called for volunteers, and enough volunteers from the civilian population have come forward for no compulsory redundancies to be required. There has been an insufficient number of volunteers from the military population so, regrettably, compulsory redundancies have been required. I do not rule out the possibility that compulsory redundancies will be required among the civilian work force in future.

James Arbuthnot: My right hon. Friend is, as always, helpful. I hope that he will now address the issue on which there is some dispute of fact—whether those in the military on whom compulsory redundancy is imposed are allowed to offer themselves for retraining; we have heard variously both that they are and that they are not. That is an important issue.
	I now turn to the strategic defence and security review—although I do not want to take too much longer because a large number of people would like to speak. One of the main aims of the Defence Committee is to see how the next strategic defence and security review, in whatever year it will be—2014, 2015, 2016; we do not yet know—can be better than the last one. Our criticisms of the last one included the fact that it was rushed to fit in with the comprehensive spending review, and was therefore undertaken without sufficient consultation with academia, industry, Parliament or the country. I heard my right hon. Friend the Prime Minister say that taking longer over decisions does not necessarily make them better, and that is true. But having proper full discussion in the country before such decisions are made would make them more informed.

Thomas Docherty: Does the Chairman of the Defence Committee agree that there was insufficient consultation with our closest allies about the implications of the SDSR?

James Arbuthnot: Yes, I do. Embarrassingly, I was fully consulted by the French Government on the introduction of their “livre blanc”, and I felt honoured, but I have no impression that the chairmen of the Assemblée Nationale or Senate committees were similarly involved in the discussion of our strategic defence and security review. That is one example of how, although Anglo-French co-operation is very good, it could still work a bit better.
	There was no sense in the strategic defence and security review of a discussion of what sort of country we wanted to be, and the threats that we were facing, followed by a decision about how we were going to face
	those threats. Instead, there was a feeling of, “This is what we can afford, so these are the threats against which we will defend ourselves,” whatever those threats turn out to be.
	For example, we now have six Type 45 destroyers. Why is six the right number? The original number was going to be 12, then it was cut to eight and then to six. When I was a Defence Minister we used to say that the right number of major ships was about 50. Why is it that now about 19 can defend our interests around the globe? However powerful a Type 45 destroyer is, it can only be in one place at any given time. There is also a concern about a loss of contingent capability. We always get our predictions about the wars that the country will face wrong, so we must be able to address unpredictable concerns that may arise.
	However, there are many things to praise in the SDSR. The cyber-strategy, very welcomingly, refocuses the Ministry of Defence, other parts of the Government and industry on future issues. It is partly to welcome that that the Defence Committee is doing a series of inquiries into the cyber-threats that we face.
	Lord Levene’s determined look at reforming the Ministry of Defence is radical. A number of my right hon. and hon. Friends, and other right hon. and hon. Members, feel that in some respects his work may be too radical or going in the wrong direction, but the Defence Committee will look at that issue, too. Bernard Gray’s focus on changing defence procurement already looks extremely promising; the Defence Committee has always been extremely impressed when he has appeared in front of us.
	I shall end as I began. In the interests of mending fences, I wish to repeat, with praise, what the Secretary of State said to the Committee in December:
	“If there is one clear lesson, it is that we have to move away from managing this business for cash to managing it for value, and that is the transition process that we are now into.”
	As I said at the time, if my right hon. Friend can achieve that, he will turn out to have been a great Secretary of State.

Lindsay Hoyle: I remind hon. Members that there is an eight-minute limit on speeches.

Nick Brown: It is a pleasure to follow the Chairman of the Select Committee in this debate. I wholeheartedly identify myself and my constituents with his tribute to our serving personnel; that issue would never divide us.
	I also want to take up the theme that the right hon. Gentleman began and place these matters in the context of the public expenditure circumstances that face our country. But before I do so, I, too, would like to welcome the Secretary of State to his new responsibilities. I am pleased that he is here, taking an interest in this Back-Bench debate, and I wish him well in the difficult duties that he has in these strained circumstances.
	I want us to look again at the case for Britain’s independent nuclear deterrent. I know that that will probably not be popular on either side of the House;
	others can make their points as the debate progresses. Given the current circumstances, it is time to consider the question again. The Government projects a total cost of £15 billion to £20 billion for the Trident successor programme. Independent research has suggested that the total cost would come in at three or four times that figure and our past experience with such big defence programmes suggests something similar.

Julian Lewis: rose—

Nick Brown: I remember giving way to the hon. Gentleman the last time I spoke in a debate of this character, back in 2007. I bet his intervention is about the same point.

Julian Lewis: Conservative Members are nothing but consistent on this issue. I remind the right hon. Gentleman that the Polaris fleet and the Trident submarines came into service on time and within budget.

Nick Brown: The hon. Gentleman presumably hopes that that will be the case in the future. However, I challenge him to point to any other defence programme from which he could extrapolate that conclusion. I know that he follows these matters with care, but I cannot think of another programme. He is right to point out the special cases of those procurements in the past, but I am not reassured that they will be repeated in the future. In any event, that point is not at the heart of my case. No matter how one looks at it, this is a very large sum of money to spend. My point is that we should look carefully at whether we should spend it.
	The maingate decision on final renewal has been pushed back until after the next general election. The cost of that is said to be an additional £1.5 billion to refurbish and prolong the lifespan of the existing fleet. Parliamentary answers from Defence Ministers show that upwards of £2 billion has already been spent on preparatory work for the manufacture of the new submarines.
	The Government clearly intend to press ahead with Trident renewal. In my opinion, they should seek explicit parliamentary authority for doing so. The failure to hold a vote in Parliament on the renewal of our independent nuclear deterrent is because of the inability to reconcile different views in the coalition. The question that faces us is whether an independent nuclear deterrent is a good use of such a large sum of public money in the present circumstances. The arguments, which were never that strong, are now moving away from Trident renewal.

Dan Byles: I am listening with great interest. Does the right hon. Gentleman not agree that a long-term strategic decision, such as the replacement of our nuclear deterrent, should not be taken in the context of the current short-term economic conditions?

Nick Brown: I will come on to deal with that precise point. I have no quarrel with the hon. Gentleman for making it.
	The current Trident system relies heavily on US logistical, capacity, technological and military know-how. It is nearly impossible to imagine any circumstances in which we would launch a nuclear attack, much less that we would do so independently of the Americans. Likewise,
	were Britain to be attacked by a nuclear power, the terms of our membership of NATO would require a joint response by all members, including the US.

Bernard Jenkin: Will the right hon. Gentleman give way?

Nick Brown: I cannot give way because of the rules on these things.
	NATO is a mutual defence pact. It is a fundamental strength that its armoury includes the nuclear capability of the US. There has always been a question over why Britain needs to duplicate NATO’s nuclear capability, rather than more usefully supplement its conventional capacity.
	When I first entered Parliament in 1983, I resisted joining the Campaign for Nuclear Disarmament. I did not support our decision to go ahead with an independent submarine-based system of our own. However, I did support Britain’s membership of NATO, which CND did not. At the time, that was regarded in the Labour party as a very establishment and right-wing position. It is a small irony of Labour politics that the same position is today seen as very left-wing.
	When the decision was taken to adopt the Trident system in the early 1980s, there was an understanding that in exchange for non-proliferation by the non-nuclear powers, there would be restraint by the existing nuclear powers, in particular the US and Russia, when it came to further weapons development and upgrades. That idea was enshrined in article VI of the nuclear non-proliferation treaty. It can be argued that that has been more honoured in the breach by countries that did not possess a nuclear capability, but that do now. The underlying principle, however, seems to me still to be sound.
	The large financial outlay that the Government are committed to in planning to replace our independent deterrent could be better spent in a number of ways. During the economic boom, I argued that we ought to better equip our troops, invest in the specialist field of anti-terrorism capability in line with the real threats that we face, and supplement our existing overseas aid budget. We now face new threats. To take one example, the money that we spend on Trident could be used to bring down substantially the tuition fees of every student. I think that cutting a generation adrift from higher education poses a bigger threat to our nation than the idea that a foreign power with nuclear weaponry would uniquely threaten to use it against us, and not the rest of NATO, and would somehow be able to disapply NATO’s founding terms. The real nuclear dangers of the future come from rogue states and terrorism. The possession of an independent nuclear deterrent does not make us safer. A better investment would be in anti-terrorism capabilities.
	Three main arguments are put forward by proponents of Trident replacement. The first is that it is the best weapon that money can buy. The second is that it guarantees a seat on the United Nations Security Council. The final argument is that it contributes to our ability to punch above our weight in the world. I argue that it is not much of a weapon if the circumstances in which it may be used cannot be envisaged. Fundamental reform of the United Nations Security Council is long overdue
	and the difficulty, as we all know, is getting agreement on what that reform should be. I also think that other countries might like us more if we stopped punching above our weight in the world. We might be better thought of by the international community if we settled for being the medium-sized European nation state that we are, rather than the imperial power that we used to be.
	We have a choice as a country: do we want to continue to drift into spending billions of pounds on supplementing a nuclear capability that we already possess through NATO or do we want to spend that money on tackling the problems that Britain actually faces in squeezed economic times? Surely we should resolve this issue now with a vote in this Parliament.

Julian Brazier: I will not respond to the right hon. Member for Newcastle upon Tyne East (Mr Brown), because I am confident that one or two of my hon. Friends will do so. Instead, I will talk for a few minutes about defence procurement.
	Twenty-five years ago, I was responsible for carrying out a survey with three colleagues as a management consultant to compare the procurement systems in seven western powers. It is depressing, a quarter of a century on, how little things have moved on from the issues at that time. I remain convinced, as I was at the end of that process, that Britain is about average or a little above average, and not as inefficient as it is presented to be by some commentators.
	I share the view of the Chairman of the Defence Committee that Bernard Gray is exactly the right man in the right job and that his report is excellent. I am deeply concerned that much of Lord Levene’s report will undermine some of Bernard Gray’s best and most important ideas, much as I respect the noble Lord and the work that he did in procurement at about the time I was a consultant.
	There is time to touch briefly on only four points, of which two relate to the procurement function and two to the Ministry of Defence. My first point is that Bernard Gray is absolutely right to point to weaknesses in the contract staff, who are grossly underqualified for the job of stacking up against the highly competent lawyers employed by the other side. In project after project, we have found ourselves badly damaged by the small print.
	My second point is about project managers. Gray, Levene and everybody else who has looked at this matter have concluded that we need more continuity in project managers and that they need to be professionally trained. Nevertheless, we are out of line with most other countries in concluding that project managers should be civilians. The most efficient procurers in the world remain, in my view, the Swedes. Their project managers are overwhelmingly military. They are in post typically for four to five years and they are properly trained before they become project managers. The problem, particularly on the army side where there are large numbers of comparatively cheap interlocking projects, is that if civilians are in charge of the projects, as in France, one ends up with lots of detailed user-problems that would have become obvious earlier if they had been before a military project manager. That is why
	France, despite spending far more on research and development than any other continental country, does not have a particularly good record on land vehicles.
	My third point goes more to the heart of the distinction—in my mind, anyway—between Levene and Gray. The heart of Gray’s report—perhaps his single most important recommendation—is at point 4 in his summary, where he says that we must
	“Clarify roles and create a real customer-supplier relationship between the capability sponsor (MoD centre)”—
	—this is a distinction that we, alone in the whole world, developed before the second world war—
	“and project delivery (DE&S)”.
	He goes on to stress that the Deputy Chief of the Defence Staff (Capability) is the man who has to drive this. In contrast, Peter Levene suggests that DCDS (Capability) should be merged with one, or possibly two, other functions out of a long list—that it should be downgraded—instead of having, as Gray recommends, one board whose secretariat and day-to-day policing should be provided by DCDS (Capability) to oversee the process. In Levene’s structure we would end up with a complete muddle, with, in effect, four different bodies considering these matters—the new Defence Board, which is all-civilian except for the Chief of the Defence Staff, and the three armed forces themselves. That would take us halfway back to pre-1936.

Bob Stewart: If the move is to make the CDS the commander-in-chief, and therefore in charge of the Army, with the same going for the other two services, surely it is proper that such people are represented on the Defence Board, if not particularly within the Ministry of Defence?

Julian Brazier: I thoroughly agree with my hon. Friend. I was about to come to that as my fourth and final point, but let me first finish my remarks on capabilities.
	There is a very important reason, which Bernard Gray fingers exactly in his original report, for having a proper supplier-customer relationship. In the second world war, the Luftwaffe had a much more powerful research and development and industrial base, but the RAF, because it had a separate capabilities group, was able to make sure that all the pieces interacted so that we did not have problems with fighters that could not talk to bombers, and so on.
	The A300M is a modern example of where that structure has broken down because—Gray criticises this—the capabilities staff have got weaker, and they will get a lot weaker still if the Levene recommendations are adopted. This aircraft is being bought for the Air Force—I have huge respect for Air Transport Command because of the brilliant work it has done in Afghanistan—but the user is the Army. Bizarrely, we have managed to arrive at a point where we are choosing to buy an aeroplane that is much more expensive than its tried and tested competitor, the Hercules, on the grounds that it can carry one armoured vehicle per aircraft whereas the Hercules cannot. If asked, the Army would say that armoured vehicles usually go by sea—it has C17s if it has to move them by air—and that it could not afford most of the armoured vehicles it wanted
	anyway. A strong central capabilities directorate would probably have been able to get a grip on that. Furthermore, the problem is as much in the detail as in the big picture.
	That brings me to my fourth and last point, which was anticipated by my hon. Friend the Member for Beckenham (Bob Stewart). Some countries, particularly on the continent, do not allow executives on to their company boards; we would say that their company boards are all non-executive. Putting those countries to one side, in all my years as a consultant—I worked on all six continents—I never came across a successful company anywhere in which the heads of the main operating divisions were not on the main board. Peter Levene’s recommendation that the individual chiefs of staff should not sit on the Defence Board is bizarre. If one puts that alongside my third point about capabilities, with the greater powers that the individual services are going to take back from the centre to monitor projects, one can see that it is a recipe for increased in-fighting and for a reduction in interoperability. That is a big step away from joined-up defence.
	I should like to end on a more positive note. With Bernard Gray, who is probably the best informed and best equipped man in the country, being put in charge of procurement, there is a fair chance that he will manage to overcome many of these problems. Certainly, under his leadership the performance of the procurement function itself will move from being a little above average internationally to being among the best. However, if we simply implement at the centre the Levene reforms as they are constituted—I have mentioned two of the weaknesses, and I could go into some of the others in detail—there is a risk that, in this area and in several others, we may undermine long-term defence planning.

Madeleine Moon: I fear that the strategic defence and security review was a cost-cutting exercise rather than an exercise that focused particularly on the defence needs of this country. As those who know me are aware, I have a particular worry about maritime patrol capability.
	Following the decision to scrap the Nimrod MRA4, we have been left with no maritime patrol capability. The £6 billion Nimrod fleet is now ancient history and resting in a scrap yard somewhere. I do not want to spend any time discussing that again, but I want to consider where we stand without the capability that it would have provided. The former Secretary of State for Defence, the right hon. Member for North Somerset (Dr Fox), summed up the problem in his infamous letter to the Prime Minister:
	“Deletion of the Nimrod MR4 will limit our ability to deploy maritime forces rapidly into high-threat areas, increase the risk to the Deterrent, compromise maritime CT (counter terrorism), remove long range search and rescue, and delete one element of our Falklands reinforcement plan.”
	I want to examine each aspect of that assertion—first, the rapid deployment of the maritime forces into high-threat areas. The maritime patrol aircraft is there to protect our nuclear deterrent. In mid-December, The Scotsman reported that a Type 42 destroyer had to be dispatched when a Royal Navy battle group appeared off the coast of Scotland. [Hon. Members: “Russian navy battle group”] I am sorry—I meant a Russian navy battle group. Did I say “Royal Navy”? That is a real Freudian slip—I do
	apologise. Clearly, my meetings with Alex Salmond have left things in my brain that I should not have brought forward. A Russian navy battle group appeared off the coast of Scotland, as have a number of Russian submarines. In addition, Russia is building a new fleet of submarines. In the past a Nimrod would have been dispatched to keep a watchful, discreet eye. Instead, we sent a Type 42 destroyer. Without the MPA, we do not know who is out there or what risks we face.
	Scotland is a part of what we should consider our back door—the high north. We spend very little time focusing on that region, but we ignore it at our peril. We tend to forget that we are a northern European country, and that the high north is growing in significance. Without a comprehensive maritime patrol capability, we cannot address the strategic and economic importance of the high north. As the ice melts in the Arctic ocean, the 160 billion barrels of oil that are assessed as being in that region are becoming more accessible. No one dreamed of those sea routes being opened up, or of the 40-day saving on travel made possible by the Suez canal being available for our shipping lanes. Without the MPA, we cannot keep an eye on those shipping lanes to watch for military deployments or respond to any disasters, whether they are environmental, security-related or human.

James Arbuthnot: I am grateful to the hon. Lady for giving way and particularly for the extraordinarily good work that she does on the Defence Committee, including in drawing our attention to issues such as the high north. In the comments that she just made, was she also making a comment about some of the possible implications of Scottish independence?

Madeleine Moon: It is vital that the House addresses the issue of defence in relation to Scottish independence. I hope that, with the Chairman’s agreement, the Defence Committee will include it in our future programme. It is a matter of grave importance to the security and defence of the United Kingdom, and we should take it extremely seriously.
	I turn to maritime counter-terrorism. On a visit to Northwood, information was given to me that having one Nimrod, a maritime patrol aircraft, was the equivalent to having 12 ships. We have only 19 ships, and we no longer have MPA capability. We have the increasing problem of countering piracy, which is a form of criminal maritime terrorism. Naval command said last year that 83 warships were needed to ensure a one-hour response time to merchant ships attacked in the high-risk area, yet in October only 18 vessels were deployed. The area of risk is huge—2.5 million square miles—and over the next 20 years, the volume of trade going by sea will increase by 50% and Navy cover will drop by 30%. Tracking rogue ships over such a wide area needs maritime patrol capability, which we do not have.
	Counter-piracy operations conducted through NATO and through EU NAVFOR—Naval Force Somalia—rely on the resources provided by members. The availability of MPA fluctuates according to demands elsewhere, and operations in Libya meant that those limited resources were diverted. We face increasing numbers of attacks in the Indian ocean, the strait of Hormuz and now off the west coast of Africa.
	Our reliance on the sea is enormous. In 2010, 35% of our total natural gas imports arrived by sea. By 2020, 70% will be imported in that way. Some $952 billion of
	trade a year passes through the Suez canal, and piracy costs the international economy between $4 billion and $7 billion a year. Those figures are being passed on to taxpayers through the rising cost of the goods transported through the region.
	There are huge problems with the proposal to post armed guards on merchant ships. I have particular concerns about the rules that would be needed to govern the licensing of firearms on UK-flagged vessels, and about what would happen to the pirates who were captured. Kenya is no longer willing to help. How will pirates be transported to third countries for trial, and what will the legal position be of both the pirates and the maritime security company that transports them there? Are we in danger of giving rise to the issue of rendition?
	I turn to our long-term search and rescue obligations. In 2010 our Nimrods were called out between 30 and 40 times to assist with search and rescue. We have an international responsibility for search and rescue covering 1.2 million nautical miles, but in a collection of letters in The Daily Telegraph in 2010, one writer said:
	“I advise mariners to avoid requiring rescue more than 250 miles from shore.”
	Without a maritime patrol capability, our capacity to rescue our seafarers is removed.
	I wish briefly to consider the Falklands. I remind the House that when the invasion started on 31 March 1982, a Nimrod arrived at Ascension island on 6 April. A battle group of Harriers did not arrive until 1 May. That maritime patrol capability gives us the flexibility that we need, and it is a matter of great urgency that the House is advised on when it will be restored.

Philip Hammond: Let me begin by paying tribute to Signaller Ian Sartorius-Jones of 20th Armoured Brigade Headquarters and Signal Squadron, who died on operations in Afghanistan on 24 January. Our thoughts at this difficult time are with his family and friends. All of us in this House are acutely conscious of the sacrifices being made in Afghanistan on a daily basis by the men and women of our armed forces. The experience of my first 100 days as Secretary of State for Defence has only reinforced my admiration for their selflessness, dedication and bravery, as well as for the commitment and professionalism of the civilians who support them. They are rightly a source of great pride to the nation.
	I congratulate my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on securing this debate on behalf of the Select Committee on Defence, and on his speech, most of which I wholeheartedly agreed with. I am delighted to have the opportunity to address the House on the defence reform programme that I have inherited, on my approach to it, and on how I will take forward the delivery of the defence outputs required under the strategic defence and security review.

James Gray: Does my right hon. Friend remember—perhaps he would do so nostalgically—the days when we had at least three debates annually on defence on a Government motion in Government time? Does he agree that this should be a Government debate rather than a Back-Bench one?

Philip Hammond: My hon. Friend will know that the Government took a decision to give a large slug of parliamentary time to the Backbench Business Committee, to be allocated according to the priorities that Back Benchers identify. That was a bold decision for a Government to take. The result is that we have that defence debate today. I hope the Committee notes, as my right hon. Friend the Member for North East Hampshire said, the strong attendance, and that that will mean we have more defence debates on Thursday afternoons in future.
	I am delighted also to have the opportunity to address the House—I have said that once so I will not say it again.

Jim Murphy: It was pretty good.

Philip Hammond: I agree.
	Today’s debate is about the reform of defence. That reform is for a purpose. Sometimes, amid the minutiae of budgets and organisational structures, we need to take care not to lose sight of that purpose: the defence of this nation and our dependent territories against those who threaten our security and our national interest.
	The challenge we face is to deliver that defence on a sustainable basis within a resource envelope that the country can afford. That challenge must be set in the context of the fiscal and economic circumstances, as other Members have noted. History tells us that, without a strong economy and sound public finances, it is impossible to sustain in the long term the military capability required to project power and maintain defence. The debt crisis is therefore a strategic threat to the future security of our nation and to the security of the west. Restoring sound public finances is a defence imperative as well as an economic one, and defence must make its contribution to delivering them.

James Morris: Does the Secretary of State agree that, in times of economic austerity, it is important that we develop collaboration with our NATO allies to enhance capabilities, so that we can engage with allies to combat some of the threats that we face?

Philip Hammond: My hon. Friend is absolutely right. Part of the answer to the questions raised by the hon. Member for Bridgend (Mrs Moon) is collaboration with NATO allies. They can share assets that they have and that we do not have, and we can reinforce their capabilities in other areas. The smart defence agenda is an important one—it involves collaboration among NATO allies in procurement to ensure that we get the best defence effect we can get with the limited budgets available.
	As I have said, defence must make its contribution to delivering sound public finances, so even if the defence programme that we inherited had been in good shape, the spending review and the SDSR would have had to find savings to contribute to overall deficit reduction. However, the defence programme that the Government inherited was very far from being in good shape. At its heart, it had a £38 billion black hole filled with procurement projects that were at best hopelessly over budget and out of control, and at worst pure fantasy. They were
	projects announced by politicians—actually, mainly one politician—without any budget cover or prospect of ever being delivered, in a programme that had no proper contingency, no effective recognition of risk, and no provision for the “conspiracy of optimism” that was evident in MOD equipment cost estimates. The support programme systematically underprovided for the proper maintenance and sustainment of the equipment that was already in service. In short, Mr Deputy Speaker, it was a shambles.

Hugh Bayley: Will the Secretary of State give way?

Philip Hammond: I will give way to the hon. Gentleman, who will perhaps explain his way out of that.

Hugh Bayley: Were the capital programmes that the right hon. Gentleman’s Government inherited supported or opposed by the chiefs of staff at the time?

Philip Hammond: I am obviously not privy to the advice given to Ministers in the previous Government by their defence advisers, nor should I be, but if the previous Government were succumbing to recommendations from the defence chiefs, they were doing them no favours by pretending that they could deliver equipment programmes for which there were no funding lines or budget cover, and when there was no prospect of their materialising.

John Woodcock: rose —

Philip Hammond: I am going to make some progress.
	Does it matter that Labour’s programme was stuffed full of projects that would never and could never be delivered? I would argue that it did, because so long as the fantasy persisted, the doctrine and philosophy of our armed forces—[ Interruption. ] If the hon. Member for North Durham (Mr Jones) listens, he might understand the point being made. So long as the fantasy persisted, the doctrine and philosophy of our armed forces were built around the notion of those platforms being delivered, when what the forces really need is a realistic programme that we can deliver and that they can have confidence in, so that they can start rethinking their doctrine and operating philosophy for the future around the platforms and capabilities that we will have.

John Woodcock: To aid this debate, could the Secretary of State just remind the House whether his party in opposition argued for a smaller or larger Army than the then Government were prepared to support?

Philip Hammond: What I say to the hon. Gentleman is that we face the situation that we face. We came into office with a massive deficit, which we inherited from the previous Government, and as I shall argue, we have taken the tough decisions that, frankly, the previous Government shirked over the last few years, thereby doing the armed forces and the country no favours.
	By 2010, Britain’s armed forces had endured a decade of high-tempo operations without a formal defence review and were faced with a period of acute fiscal pressure. The case for reform to ensure that the armed forces were restructured and re-equipped to protect our
	national security against the threats that we would face, within a budget that the nation could sustain, was unanswerable. Tough decisions were necessary to deal with problems on the scale of the inherited defence deficit, and this Government took them. I am clear, as the Prime Minister and my predecessor have been, that whatever the pain, our first duty is to put our armed forces on a sustainable basis by restructuring them for the future and putting the budgets that sustain them on a stable footing. As the SDSR acknowledged, the process of transitioning to Future Force 2020 will require us to take some calculated and carefully managed risks against certain capabilities, most prominent among which are wide-area maritime surveillance, to which the hon. Member for Bridgend referred, and carrier strike.
	I regret in particular the cuts in personnel that are required to deliver that rebalancing and make the armed forces sustainable. However, in case any confusion has been created over the last few days, let me clear up one point. The headcount of military personnel will have been reduced by around 18% by 2020 compared with the 2010 baseline. That is in contrast to a 38% reduction in civilian headcount. Regrettably, some of that reduction will have to be achieved by redundancy. Where that is necessary, every opportunity is being given, and will continue to be given, for military personnel at risk of redundancy to retrain for alternative roles of which there are shortages in the armed forces.
	I heard the comments of my right hon. Friend the Member for North East Hampshire earlier. Following the publication of the Select Committee’s report, I have asked for a specific briefing on the point that he raised. I would be happy to share that with him after the debate—[ Interruption. ] I will share it with the right hon. Member for East Renfrewshire (Mr Murphy) as well, if he wishes. It includes a list of the shortage trades for which suitably qualified individuals who are facing redundancy are invited to apply.

Damian Collins: The large number of redundancies in the Gurkhas has inevitably caused concern among them and in my constituency. Will the Secretary of State give me a commitment that the Gurkhas will remain a unique and important part of the British armed forces?

Philip Hammond: The Gurkhas remain a very important part of the British armed forces. I think that my hon. Friend understands exactly the problem that we face in regard to Gurkha numbers. Their terms of service were changed as a result of decisions made by the courts and the campaigning pressure that was placed on the previous Government. That means that most Gurkhas have elected to extend their service to 22 years. Consequently, the numbers of Gurkhas in service are projected to be above the levels needed to sustain the two brigades that we wish to sustain. That has given rise to a larger number of Gurkha redundancies than we would have expected to see. That is regrettable but, I am afraid, inevitable.
	We are making tough decisions to tackle the massive deficit left by the previous Government and the unfunded defence programme. If those decisions had been easy or popular, you can bet your life that the Labour Government would have taken them years ago. They did not do so, however, and it now falls to the coalition to do the right
	thing in the long-term national interest. Translating the strategic prescriptions of the SDSR into decisive actions was always going to be a process rather than an event. Turning the corner on a decade of mismanagement will take time and determination.
	To shine a bit of light into the end of the tunnel, the Government announced in July 2011 that the MOD could plan on the budget allocated to defence equipment and equipment support increasing by 1% a year in real terms between 2015 and 2020. That amounts to more than £3 billion of new money over the period. Importantly, that commitment was renewed by the Chief Secretary to the Treasury after the autumn statement. That will enable investment in a number of programmes, including the procurement of new Chinook helicopters, the refurbishment of the Army’s Warrior fleet, the procurement of the Rivet Joint, or Airseeker, intelligence and surveillance aircraft, and the development of the global combat ship.
	The MOD is currently undertaking its annual budget setting process, which is known as the planning round. I am personally engaged in that process, and I am increasingly confident that we are close to achieving a sustainable and balanced defence budget for the first time in a decade or more. That would be an immense achievement, and would allow us to plan with confidence and to spend well over £150 billion on new equipment and equipment support over the next decade, as well as delivering the force restructuring and rebasing that we have announced. A turnaround on that scale requires a major cultural shift. Defence must change the way in which it does things and the way in which it addresses problems. It must challenge the received wisdom around the doctrines used to deliver defence tasks and around the management of defence itself.
	Last month, the Government published the first annual report on the SDSR, which set out in full the progress that is being made. Let me address a couple of salient areas of what the MOD calls “transforming defence”—that is, the journey from the mess that we inherited towards achieving a sustainable, capable, coherent and adaptable force, built on balanced budgets and disciplined processes, by 2020. As I have said, I am clear that the Ministry of Defence must balance its budget. I am equally clear that it does not exist to balance its budget; it exists to deliver effective defence within a sustainable budget envelope.

Bob Russell: Will the Secretary of State give way?

Philip Hammond: I cannot resist taking one last intervention.

Bob Russell: Will the Secretary of State accept that morale is very important, and if our soldiers, sailors and air personnel and their families are given accommodation that is not fit for purpose, that does nothing to help the Government’s objectives?

Philip Hammond: I reassure my hon. Friend that I absolutely agree that morale is very important. I shall come to morale in a moment, and I understand that accommodation plays an important part in that. He will understand that there are thousands of moving parts in the defence budget, and trying to bring them back into balance is a massive challenge. Inevitably,
	people will always ask us to do more, more quickly, whether on accommodation, front-line equipment or any other area. We must try to balance the equation and get the judgment right.
	As I said, the Ministry of Defence exists to deliver an effective solution within a sustainable budget envelope. NATO membership and our defence relationship with the United States and other key allies, such as France and Australia, are a vital part of the strategic solution as we move to Future Force 2020. It will, of course, be a smaller force, but it will be equipped with some of the best and most advanced technology in the world. It will be configured to be agile, focused on expeditionary capability and carrier strike, able to intervene by airborne or amphibious assault, and with the ability to deploy, with sufficient warning and for a limited time, a whole-effort force of about 30,000, or to maintain an enduring stabilisation operation at brigade level while concurrently undertaking one complex and one small-scale non-enduring operation. It will be a formidable regular force, supported by better trained, better equipped reserves who will play a greater role in delivering defence effect on the back of the extra £1.8 billion that we will invest in them over the next 10 years. All that will be underpinned by the expectation that, in most circumstances, we will be fighting alongside allies, and it will be supported with doctrines that will effectively address the threats of the future with the assets that we will have.
	The proposal is about finally moving on from cold war reliance on mass to the “lethal and light” doctrines of flexibility and agility that the challenges of the new century require. It is not just the armed forces that need to reconfigure; the management of defence needs to change too, by developing a laser focus on delivering defence cost- effectively and accountably, protecting the front line and the taxpayer at the same time. Under my predecessor, that transformation had already begun. The recommendations of the Defence Reform Unit under Lord Levene were broadly accepted. Many have been implemented and others are in the pipeline. The Defence Board has been reconfigured to provide for a clear, single, joint service voice on military priorities, and a greater role for non-executive directors under the chairmanship of the Secretary of State. I reassure my hon. Friend the Member for Canterbury (Mr Brazier) that the single voice for the military on the Defence Board is supported by an effective armed forces committee, at which the chiefs of the individual services are able to work together to determine their combined order of priorities for the Defence Board’s allocation of available resource. That priority order is then presented to the Defence Board by the Chief of the Defence Staff—a presentation that has become extremely effective, because it carries with it the authority of all three services and the joint forces commander.
	The Defence Infrastructure Organisation has been stood up to rationalise the Ministry of Defence estate and reduce costs by 25%. Defence Business Services has been created to unify human resources and other back-office functions across the Department. The reform of the procurement process has begun with the appointment of—you guessed it, Mr Deputy Speaker—Bernard Gray, who has now had four name checks, I think, so far in the debate, as chief of defence matériel, and the
	establishment of the major projects review board to hold those responsible for failing projects firmly to account.
	This year will see the transformation accelerate, with an evolution towards a leaner, more strategic head office; the introduction of a stronger financial and performance management regime across the whole Department; the service chiefs being empowered to run their individual services and their delegated services budgets; the new joint forces command being stood up on 1 April; and the start of the reform of the MOD’s defence equipment and support business on the basis of a new matériel strategy.
	The next few years will also see the beginning of considerable change on the ground as the rebasing programme set out in July last year is taken forward and the Army begins its return from Germany, as well as its withdrawal from Afghanistan and its internal restructuring to deliver five multi-role brigades. I know those last changes, in particular, are of great interest to individual Members. The House will understand that many of the changes are interdependent and complex, but I can give a commitment that I will make further announcements on the details of individual elements of the transforming defence programme as and when it is appropriate to do so.

Menzies Campbell: Will my right hon. Friend give way?

Philip Hammond: I thought that might provoke my right hon. and learned Friend.

Menzies Campbell: First, I should apologise for being unable to be present at the beginning of the debate due to other responsibilities.
	My right hon. Friend is right to say that the basing decisions have caused a great deal of disappointment. In the case of my constituency, the closure of RAF Leuchars, which has provided nearly 100 years of service in aerial warfare, has been particularly difficult to accept. Part of the argument in favour of that closure was that there would be specific deployments of units of the Army to occupy the base. So far, very little detail has been made available. May I encourage my right hon. Friend to ensure that the announcements he has just foreshadowed will be made as soon as possible?

Philip Hammond: I can reassure my right hon. and learned Friend on that point. RAF Leuchars is not so much closing as transforming its role to become the home of one of the five multi-role combat brigades after the rebasing of the Army back to the UK.
	The purpose of all the changes is to increase the investment we can make in service people and their equipment and training, to increase investment in the front line by making the back office more efficient and more accountable, and to deliver value for money in defence. I know that change is unsettling and that the threat of change and the uncertainty it brings can sap morale, which my hon. Friend the Member for Colchester (Sir Bob Russell) mentioned. I will make every effort to ensure that the people who are directly affected by the proposals are kept fully informed as they progress and that we get the changes made as quickly as humanly possible.

James Gray: Will my right hon. Friend give way before he moves on?

Philip Hammond: I will not give way to my hon. Friend a second time, as I am conscious that a large number people wish to participate in the debate.
	People remain the greatest asset of defence and, despite the tough decisions that must be taken, we will do all we can to protect them. This Government understand our duty to the country and to our armed forces. We have made the tough choices necessary to put them on a sustainable footing for the defence of national security and of the United Kingdom’s interests around the world. We know that making those changes will not to be easy, but I have no doubt that the British armed forces that will emerge will be formidable, flexible and adaptable, supported by the fourth largest defence budget in the world, meeting our NATO responsibilities and equipped with some of the best and most advanced technology on earth.
	To get there, we need not just the series of structural and organisational changes I have set out, but a cultural shift in the way the organisation thinks and works. We need a shift in military doctrine to deliver the defence effect we will need, using the capabilities we will have; a shift in civilian culture to one of discipline, individual accountability and delegated decision making; and a shift to a leaner, fitter, more empowered and more empowering organisation. This is a programme of renewal and change of a scope and on a scale greater than anything else being delivered across the public sector. It is a blueprint for a sustainable future for the UK’s armed forces as one of the world’s most capable fighting machines. That is what Britain needs and what our armed forces deserve, and as we move forward to deliver it we will never forget that at the heart of this organisation are the servicemen and women who are prepared to put their lives on the line for us day in, day out. We owe it to them to make sure that the transformation we have embarked upon delivers its full promise.

Jim Murphy: I welcome the opportunity to speak in this annual debate.
	The debate was initiated by the Select Committee on Defence and facilitated by the Backbench Business Committee, but I hope that in future the time allocated will be additional to that allocated by the Government to such debates.
	I congratulate the Chair of the Defence Committee, the right hon. Member for North East Hampshire (Mr Arbuthnot), on his very thoughtful speech. Even though parts of it criticised the Government of whom I was a member, his assessment was often fair. Parts of his speech, however, were in stark contrast with the opening passages of the Secretary of State’s partisan comments.
	It is right that we remember the names of those serving in our name across the world and those, such as Ian Sartorius-Jones, who have lost their life serving our nation, particularly in Afghanistan, which must remain our country’s principal defence mission. The bravery of the UK’s servicemen and women is in all our thoughts and many of our prayers. Their actions overseas make our country safer and we thank them and their families.
	We continue to support strongly the mission in Afghanistan because we are entering a difficult phase in that conflict. With 33,000 US troops and 500 UK troops departing this year, and with the pace of further withdrawal yet to be set, the capacity of Afghan forces is a crucial issue. There are worrying signs in terms of retention rates and recent high-profile infiltrations of those forces. Building the strength and the legitimacy of the Afghan national army and police force must be a priority for this year alongside the delivery of representative, stable local governance and the continued engagement of regional partners. Labour will continue to support and scrutinise the Government, as well as pressing for the pace of withdrawal to follow the conditions on the ground. It is vital that we have clarity as soon as possible on the size of any residual UK force in Afghanistan and on its responsibilities.
	Afghanistan sits alongside many new and emerging threats faced by the UK and our allies. Events in north Africa and the middle east continue to prove this. The potential for conflict between states or among peoples is on the rise.

Rory Stewart: rose —

Jim Murphy: I anticipated that the hon. Gentleman would seek to catch my eye and I will gladly give way.

Rory Stewart: Will the shadow Minister please explain what he proposes to do to achieve a stable, effective Government in Afghanistan that has not already been proposed by the Government?

Jim Murphy: I am sure the hon. Gentleman will appreciate that I said right at the beginning that I am keen to have a bipartisan approach in Afghanistan, and that will continue. There is sometimes a temptation with these very difficult, often impractical, problems to give in to the temptation to seek and find synthetic differences, but as I have said before at the Dispatch Box it is important that this year there should be a genuine political process to match the military might of the past decade. That did not happen last year, and it should be compulsory this year. The Bonn conference was a failure in that regard, but I did not attack our Government for that from the Dispatch Box because it was an international failure to formulate the political strategy that that country so badly needs.

Tobias Ellwood: I appreciate that the right hon. Gentleman was not in post during the relevant period, but does he regret not conducting a defence review in the past decade? A review might have helped to identify the fact that Snatch Land Rovers were not appropriate in Afghanistan. We went through a period of bizarre procurement in which the Ridgback, the Cougar, the Vector, the Jackal and the Mastiff were produced one after another and bought off the shelf to try to identify something that would work in Afghanistan. If we had held a defence review, perhaps we would have seen that the conduct and style of war was changing before our eyes and we could then have ensured that we sent our armed forces to Afghanistan with the right equipment.

Jim Murphy: The hon. Gentleman has great and varied experience, but I think he will fairly accept that the urgent operational requirements worked well in Afghanistan, and after 9/11 we updated our defence
	review with a new chapter. In a debate that is intended to be relatively thoughtful rather than our traditional cut and thrust, it is fair to say that the nature of the conflict in Afghanistan changed and surprised many people, including those who were engaged in it day to day. As we reflect on what happened in Afghanistan, it is crucial that we learn deeply the lessons of the conflict, in the hope that we never have to deploy them, but in the fear that on occasion it might become necessary.
	I was making the wider point that events in north Africa and the middle east continue to prove the uncertainty and unpredictability of the future shape of conflict. Coupled with the Arab spring, the growing global population, the threat of climate change, new information technology and biotechnologies, nuclear proliferation and cyber-attack, we live in what is, by consensus, an era of dramatic new global security challenges. All that means that it is sensible for the Government to invest the £650 million they have announced for cyber-security. The continuing emphasis on soft power and multilateralism to supplant the inevitable capability shortfalls resulting from spending constraint is vital. It was crucial in good times, but it is compulsory in these difficult times of budget cuts in a world of flux.

Andrew Murrison: The shadow Chancellor is on record saying that he accepts all the Government’s spending cuts. However, the shadow Defence Secretary says that he thinks only £5 billion-worth of cuts in defence are necessary. Who is correct?

Jim Murphy: I have learned from experience that it would never be wise to misrepresent the words of the shadow Chancellor, and I dare say the hon. Gentleman is doing just that. We have been pretty clear; we cannot commit to reverse specific cuts that the Government have made. Similarly, before the 1997 election we said we would stick to the size of the state for the first two years of a Labour Government. It is important to be clear: before that election, we committed not to reverse individual spending cuts.
	On defence reform, we know that we must meet the ambitions for our forces that we share across the Chamber, and which the Secretary of State referred to at the end of his comments. Reform is more important than ever before and when the Government make the right choices, they will have our backing. I listened carefully to the hon. Member for Canterbury (Mr Brazier), who spoke with real passion about an important issue that can often be quite dry. Much of the restructuring of the MOD announced in the Levene report was as welcome on the Opposition Benches as it was, in the majority of cases, on the Government Benches, in particular, greater financial powers for service chiefs. Some of the rebalancing of the equipment programme, notably cutting tank regiments, was necessary and has our support.
	Unfortunately, that is not the case for every decision taken in the Government’s controversial and much criticised defence review, which has set our country’s defence policy on an uncertain path. However much some try to depict the process as a success, the evidence to the contrary is striking. The strategic defence and security review was immediately reviewed in a three-month study that announced thousands of further redundancies in
	our forces and the civil service. There are new unfunded liabilities on the balance sheet and further cuts to the equipment programme appear imminent. The conflict in Libya saw military equipment planned for the scrapyard recalled. The UK has been left with serious capability shortfalls for a decade, most notably the carrier strike capability gap. Military experts have repeatedly been open in their criticisms, and all in all it is a cuts package still in search of a defence strategy and there should be a rethink.
	On forces welfare, I welcome much of what the Secretary of State has said in the announcements that he has made in advancement of forces welfare, but last week saw 400 Gurkhas being made redundant—the second painful cut they have had to endure in just a few months. The whole House will recall that the Prime Minister championed those remarkable soldiers in opposition, and many will agree with the Defence Committee’s statement that the level of compulsory redundancies among those in uniform is “grotesque.” That comes alongside cuts to front-line allowances, and permanent changes to pensions that will disproportionately affect members of the armed forces and their dependants, who rely on their pensions at an earlier stage in life than almost anyone else.

Philip Hammond: rose —

Jim Murphy: I will happily give way, because I anticipate that the right hon. Gentleman’s fidgeting—

Lindsay Hoyle: Order. One standing up, one sitting down, not two standing at once.

Philip Hammond: I am sorry, Mr Deputy Speaker. The right hon. Gentleman says he is giving way, then stays standing up for another three sentences. I am confused. He says the redundancies in the armed forces are grotesque, but he says he will not reverse the spending cuts that the Government have announced. Which is it? Is he going to reverse the cuts or is he going to accept the redundancies?

Jim Murphy: As the right hon. Gentleman knows, I am echoing the assessment and the assertion of the all-party Select Committee, and now that the right hon. Gentleman and his friends have sacked those soldiers, we cannot re-employ them. That is very clear indeed.

Philip Hammond: The right hon. Gentleman is not going to wriggle out by putting it in an historical context. A tranche of military redundancy is going on right now, and regrettably there will have to be further tranches. Would he scrap them and, if so, where would he get the money from?

Jim Murphy: It is ironic and peculiar that the current Secretary of State is seeking a commitment from the official Opposition to reverse cuts that he has not even yet announced. It is a ludicrous way to conduct politics and economics.
	This cut comes alongside cuts to front-line allowances, and permanent changes to pensions, which will detrimentally affect those who require to take their pensions earlier in life. A corporal who has lost both legs in a bomb blast in Afghanistan will miss out on £500,000 in pension and benefit-related pensions. War
	widows will also lose out enormously. A 34-year-old wife of a staff sergeant killed in Afghanistan would be almost £750,000 worse off throughout her life.
	Ministers blame deficit reduction but the argument does not add up. These changes are permanent, so the impact will be felt long after the deficit has been paid down and the economy has returned to growth.
	I believe it is uncomfortable for us all that Sir Michael Moore, the chairman of the Forces Pension Society, has been moved to say:
	“I have never seen a Government erode the morale of the Armed Forces so quickly”.
	What has been the Prime Minister’s response? It has been a Cabinet Sub-Committee of his Ministers. To those in the front line, that will be little consolation. Indeed, given some of the decisions that have been taken, they are likely to want less, not more ministerial meetings. As I have previously said, I think there is a case for fewer Ministers in the Ministry of Defence in and of itself.
	As the Secretary of State has rightly said, UK armed forces are a “force for good” across the globe, bringing peace to the Balkans, promoting stability in Sierra Leone, building capacity across Africa, supporting the actions around Libya, the normalisation of Northern Ireland and counter-terrorism at home and overseas, including in Iraq and Afghanistan. We want our forces to continue to play such a world-leading role, but their ability to do so is being challenged by the decisions of the Government.

Julian Lewis: I thank the shadow Secretary of State for giving way so courteously. In his list of commitments, the one thing he has not mentioned is the strategic nuclear deterrent. In the light of the first contribution that was made from the Opposition Back Benches, would he care to reiterate his party’s commitment to the renewal of the strategic nuclear deterrent?

Jim Murphy: My hon. Friend the Member for Barrow and Furness (John Woodcock) is over my right shoulder, and I would not wish to steal his speech, because without anticipating its detail I expect it will be a detailed rebuttal of my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown). Briefly, our view remains that we believe in the minimum credible independent nuclear deterrent. The timing of the Government’s process does surprise many, because it seems to be designed for internal political dynamics rather than the defence of our nation, but generally we do support the retention of the minimum independent nuclear deterrent, and we look forward to an informed debate about its renewal.

Menzies Campbell: Will the right hon. Gentleman give way?

Jim Murphy: I have given way more often than I probably should have, Mr Deputy Speaker, given that I am sure you will encourage me to sit down in just a couple of minutes, but on the basis that he is not only a right hon. and learned Member but also a friend, I will give way briefly to the right hon. and learned Member for North East Fife (Sir Menzies Campbell).

Menzies Campbell: The right hon. Gentleman has spoken at some length and with some eloquence about the uncertainties that the face defence of the UK, but has he considered the uncertainties that would face the defence of the UK were there to be an independent Scotland—not least for Scotland, but for all the rest of the United Kingdom? Our reputation and our capability are well recognised; how far does he think these would be capable of being sustained in the event that there was an independent Scotland?

Jim Murphy: The right hon. and learned Gentleman makes a compelling argument. I look forward to being part of the discussion during the referendum campaign. I have only two more points to make: the first is about finance but the other is about Scotland, which will allow me to respond to that intervention in more detail.
	The Secretary of State mentioned the £38 billion figure, but that is Ministers’ response to every single issue. They use a catch-all Conservative assertion as a fact and so attempt to escape their responsibility, but in its report on the SDSR the Defence Committee stated:
	“We were disappointed by the MoD’s response to our requests for a breakdown of the MoD’s financial commitments, including details of the components of its estimate of a £38 billion gap in the defence programme”.
	When the previous Secretary of State gave evidence to the Committee, he was asked to provide that information, but it has still not received it. He said that he would provide it, but when challenged he said:
	“Offhand, I couldn’t give an actual figure, but I will get it for the Committee.”
	The Committee has not received it. In evidence to the Public Accounts Committee, the MOD director of general finance said that
	“Ministers have committed to making a public statement”
	on the MOD’s spending gap. They have not made it. We look forward to the promised information being made available not only to the Defence Committee and the House, but to the forces, their families and the country. Until Ministers provide it, there will be an enormous gap in the Government’s explanation for their decisions.
	Finally, let me respond to the point about Scotland made by the right hon. and learned Member for North East Fife and my hon. Friend the Member for Bridgend (Mrs Moon), who unintentionally but inelegantly described Scotland as “our back door”. For many of us it is home and we want never to see a Royal Navy battlegroup off the coast of Scotland, except perhaps as it sails from there to foreign shores; but while there are real worries about the Government’s defence policy on the Opposition Benches and across the country, those are dwarfed by the worries about the defence plans of another Government on these isles—the Scottish Government.
	Although I criticise the rushed nature of the UK Government’s defence review, I make the opposite criticism of the Scottish National party Government’s approach. Their party has been around since 1943—

Menzies Campbell: They’re not around today.

Jim Murphy: They are almost represented by my hon. Friend the Member for Edmonton (Mr Love), who is almost sitting in their usual place. An expat Scot, he looks as though last evening he spent a lot of time enjoying Burns night. [ Laughter . ]

Thomas Docherty: Will my right hon. Friend give way?

Jim Murphy: I know I am testing your patience, Mr Deputy Speaker, but out of good manners I will give way to my hon. Friend.

Thomas Docherty: My right hon. Friend is being most generous, as are you, Mr Deputy Speaker. Is he aware of the sheer anger felt in Fife that after more than a year of SNP Ministers saying that they would save RAF Leuchars, they have betrayed the people of Fife with a cynical policy U-turn?

Jim Murphy: My hon. Friend has campaigned long and hard on RAF Leuchars, as has the right hon. and learned Member for North East Fife. It is remarkable that SNP Members have toured that part of Scotland promising to keep open three bases, but now describe the Government’s policy as a blueprint for the defence of an independent Scotland.
	The SNP has been around since 1934 and has been in power in the Scottish Government for five years, but SNP Ministers have not even done the most remedial of thinking. Scotland currently sits at the heart of one of the most successful union of nations anywhere on earth. The UK has a seat at the United Nations Security Council, an invaluable transatlantic bond and a vital role in the EU, NATO and the Commonwealth. A collection of people from four different countries serving in Her Majesty’s armed forces have achieved great things together in the past and will, I am certain, do so in the future as well. The SNP wishes to turn the defence debate into a referendum about the location of Trident, as if moving it a few miles across the border would make Scotland inherently safer. SNP Members may be hiding today, but they cannot hide from the truth that their policies are incoherent and will take Scotland out of the RAF, the Royal Navy and the British Army, as well as having an irreversible impact on shipbuilding on the Clyde and Rosyth. Amid all the argument about the single question to be asked in the referendum, the debate must be about all of the answers that the SNP refuses to provide.
	Where the Government are doing the right thing in the national interest, whether it is Afghanistan, Libya or defence reform, we will continue enthusiastically to support them. Therefore, today, I enthusiastically thank the Chair of the Select Committee and all its members for their forensic work in scrutinising the previous and the current Governments on their work on defence, and I thank the Backbench Business Committee for enabling today’s debate.

Michael Crockart: I welcome the opportunity to speak in today’s debate. I should declare my interest as a Member for a constituency facing the loss of an historic headquarters, and a resident of a city facing the loss of an additional two barracks. I have been calling on the Ministry of Defence to rethink their proposals. I made the case for a future for Craigiehall to the Secretary of State for Scotland in November, and my contribution today restates that call.
	The SNP may, now at least, be happy with the basing plans for Scotland, especially given their absence today, but I am not. The plan put forward is to replace
	Dreghorn, Redford and Craigiehall, the three historic Edinburgh bases, with a new purpose built super-barracks for a multi-role brigade at Kirknewton, a command headquarters to be incorporated into the new formation headquarters at Leuchars, and an expansion of Glencorse barracks near Penicuik.
	The basis for the Ministry’s proposal is financial—the sell-off of land for prime residential development to produce attractive capital receipts. A super-barracks will, I am told, be more cost-effective in the long term, saving taxpayers’ money and boosting Treasury funds. It is an understandable and laudable aim, but I am extremely dubious about whether the plan has been properly prepared, or is capable of delivering the savings envisaged.
	To date, I have asked almost 100 parliamentary questions to try to understand the financial reasoning behind the decision. Not one answer has given any details of likely costs or possible capital receipts from disposal of the Edinburgh estate. Instead, time and again I am told, “It’s too early,” or “Comprehensive planning is under way,” or “The information is not held in the format requested.” The Minister was
	“not able to provide a cost estimate”—[Official Report, 5 September 2011; Vol. 532, c. 91W.]
	for the building of the new barracks at Kirknewton. Running costs for the base seem equally unclear. He wrote:
	“it is not possible to confirm budgetary requirements or allocations.”—[Official Report, 9 September 2011; Vol. 532, c. 844W.]
	How, then, is it possible to do a comparison with the costs of the undoubted modernisation work needed at Dreghorn and Redford? No audit seems to have been carried out to establish the modernisation costs.
	The story is not much better on capital receipts. I asked the Ministry what value it had placed on Craigiehall. The answer indicates that no recent valuation of this or the other sites had been carried out. The proposed capital receipts were, I believe, based on valuations done in 2007, when the property boom was at its height. A further report was commissioned and carried out in March last year by GVA Grimleys, but despite tenacious attempts, there seems to be a great reticence to publish any detail from that.
	If Craigiehall is to be used as a new business site, I have bad news. The industrial capacity in Newbridge and the, as yet unstarted, international hub development next to the airport are close locations that would be far more desirable. There are also development limitations cased by the listed building status of large parts of Craigiehall and also Redford barracks, which may make the sites difficult to sell. The depressive effect of all of those sites coming on to the market at the same time is likely to limit their value severely. The financial case is, as we say in Scotland, on a bit of a shooglie peg.
	It is not just the financial case that is lacking in detail. On an array of important factors there is worrying ambiguity. The Minister cannot tell me what transport infrastructure is needed in and around Kirknewton to allow an Army base to function, but
	“comprehensive planning work is now under way”—[Official Report, 18 October 2011; Vol. 533, c. 867W.]
	The reply to questions about the effects on schools, housing and health services for Army personnel is always the same: “Comprehensive planning work is now under
	way.” In fact, that is the reply to almost all my questions about the proposal. Surely comprehensive planning work should have taken place before the decision to close three historic bases and commit to £600 million of new spend.
	The Army, too, has its concerns. I have spoken at length with the commanding officer and understand that Glencorse barracks is near capacity. There are serious concerns about the feasibility of moving the Army to a super-barracks, and about the recommendations of the review in general. There is a desire for Leuchars to remain a back-up airfield for Typhoon operations in case of adverse weather conditions in the north of Scotland. The work needed to make the base at Lossiemouth operational, and dates for the completion of that work, are unclear.
	There is also strong concern among the civilian population in areas of Edinburgh where Army families are currently based. A move away by the Army would put local shops and schools in jeopardy, as roll numbers would fall significantly. Local businesses would be affected and a tight-knit community would be destroyed. The MOD has indicated that the current service family accommodation in Edinburgh will be kept and used for personnel based at Kirknewton, but it is difficult to see how that will work in practice. I attended a road show about the proposals, at the invitation of the Army Families Federation. The families have been given very limited details about their proposed resettlement, and the uncertainty is understandably causing a great deal of stress.
	Particularly worrying is the period between 2014, when Redford and Dreghorn will close, and 2017, when Kirknewton is likely to become operational. The units currently based in Redford and Dreghorn are light infantry and, as such, not the type that would form part of a multi-role brigade, so at some point they will be relocated and other units will need to move in, but it is not clear which base they would operate from.
	As I have said, the proposal is also significant for my constituency. The closure of Craigiehall confirmed that, despite a 3,500 increase in Army numbers and a major restructuring exercise currently under way, Scotland will lose its command headquarters, although a welcome senior Army presence will be kept to provide representation and communication with the Scottish Government and others; a two-star officer, to be known as General Officer Scotland, will be based in Scotland with a small support team. Nevertheless, replacing the divisional headquarters with a single support command headquarters will reduce the opportunity for the Army to engage with high-level regional and local partners in Scotland.
	The closure of Craigiehall HQ would also have a significant impact on post reductions, which would affect civilians currently employed. In Edinburgh West, 103 civilian roles would be lost in addition to 89 military posts, which would mean the loss of experienced and skilled staff at a time when two further HQs are planned to move into Scotland to Leuchars and Kirknewton. I believe that there are clear efficiency savings to be made in co-locating headquarters at Craigiehall. It would not only work at a command and cost level, but save the experience and skills of those already at Craigiehall.
	I think that the current capacity review will reveal that many aspects of the present proposals are simply undeliverable, and that Craigiehall might be best placed
	for a multiple HQ base. If the case is financial, accurate and up-to-date figures are needed to demonstrate its cost-effectiveness. When accurate figures are available, and not before, a decision can be made on the future of the Army estate in Edinburgh, taking into account all the issues. I urge the Ministry to think again.

Hugh Bayley: Defence debates in this House are best when Members stick to national security, rather than party political knockabout. I respect the Secretary of State, who I think is a very capable Minister, and wish him well in his new post—but, like my right hon. Friend the Member for East Renfrewshire (Mr Murphy), I regret the party political tone of some of his remarks, and feel that I should briefly respond.
	I have been a Member for almost 20 years, and during that time, under Conservative Governments the defence budget has been cut as a proportion of national income, and under Labour Governments it has increased. Under the Major Government, between 1991-92—when I entered the House—and 1997-98, the share of national income, or GDP, spent on defence fell from 4% to 2.5%; under the Blair-Brown Government it rose from 2.5% to 2.7%. In a parliamentary question to the Chief Secretary to the Treasury last week, following the second tranche of redundancies, I asked what proportion of national income is spent on defence, and was told that it is still 2.7%. But the Chief Secretary continued:
	“It is impossible to state exactly what percentage of GDP or gross national income will be spent in future years…However, I expect the percentage to remain above the 2% NATO target.”—[Official Report, 25 January 2012; Vol. 539, c. 240W.]
	In other words, it will fall, and fall quite significantly.

Dan Byles: On those figures, does the hon. Gentleman not accept, however, that the international situation was changeable? We had the end of the cold war and the widespread demand for a peace dividend during the period that he referred to under the Major Government. We then had 9/11 and the wars in Iraq and in Afghanistan during the period that he referred to as the “Blair-Brown” years, whereas we are now out of Iraq and will shortly pull out of Afghanistan. He cannot look at the issue in isolation.

Hugh Bayley: The hon. Gentleman makes some fair comments, but the Government have not established that the level of risk facing the country is declining, so they have not made the case in defence and security terms for the reduction in expenditure that they are making.
	The United States, the UK, France, Greece and Albania are the only NATO members that spend at or above 2% of their GDP on defence; the other 23 of the 28 NATO allies spend less. The Libya campaign showed that current European spending on defence is not sufficient to conduct an effective military operation against a poorly armed regime distracted by a civilian uprising in a sparsely populated country with only 6 million inhabitants. Within weeks of the start of military operations, European countries were running out of precision-guided missiles and needed to turn to the United States to provide them. We also needed to turn to the United States to provide surveillance aircraft to identify targets and to provide air-to-air refuelling.
	All 28 NATO member states voted for the Libya campaign, but less than half participated in it and fewer than one third contributed to strike operations. In June 2011, in a speech in Brussels, the outgoing United States Defence Secretary, Robert Gates, said that
	“many of those allies sitting on the sidelines do so not because they do not want to participate, but simply because they cannot. The military capabilities simply aren't there.”
	That led Mr Gates, just before he left office, to question the future of NATO, and in the same speech he said:
	“If current trends in the decline of European defence capabilities are not halted and reversed, future US political leaders…may not consider the return on America’s investment in NATO worth the cost.”
	Robert Gates is not a maverick. He served as Defence Secretary under the Bush presidency and under Obama, and in that speech he articulated views that are frequently expressed by members of the United States Congress and other US speakers at meetings of the NATO Parliament Assembly, which I attend along with the right hon. and learned Member for North East Fife (Sir Menzies Campbell), who leads our delegation. Indeed, a report adopted by the economics and security committee at our most recent meeting in October 2011 stated:
	“If anything, Secretary Gates was being diplomatic. Europe’s defence posture has grown woefully weak…It is time for Europe to get serious about this issue.”
	In November, in a speech to the Australian Parliament, President Obama declared that the United States was a Pacific power, and said that maintaining a military presence in the Asia-Pacific region was a top priority and would not be affected by United States defence cuts—a point that he re-emphasised earlier this month in a speech at the Pentagon about the US comprehensive defence review.
	Those statements from our American allies make it clear to me that we in Europe need to do more than we are currently doing. Although we stay above the NATO target of 2% of GDP spending on defence, our defence cuts in the UK make it harder for us to persuade our European allies of the need for them to do their bit and get their spending up to that target.
	In President Obama’s speech at the Pentagon he said:
	“the size and the structure of our military and defense budgets have to be driven by a strategy, not the other way around.”
	The UK Government need to operate on the same basis. I therefore believe that the defence cuts that the Government have announced should be contingent on the successful implementation, on a Europe-wide basis, of a strategy to increase defence expenditure and make better use of the resources that we already have by eliminating waste and duplication.
	The UK-France defence and security co-operation treaty is a step in the right direction. It will allow the shared deployment of aircraft and aircraft carriers and air-to-air refuelling capabilities, and I am sure that as a result capabilities will be provided more cost-effectively than if we did such things alone. The nascent Nordic defence co-operation is another example. But we clearly need more shared assets in Europe. Why are we not buying strategic airlift on a joint basis with allies, as NATO did with the airborne warning and control system,
	or AWACS—although the UK, of course, did not join that initiative? Why do we not do the same with air-to-air refuelling?
	Most of all, we need better co-operation in our defence industries. The armed forces in Europe have more service personnel than the United States, but we are way behind in terms of defence budgets, investment and capabilities.

Madeleine Moon: One way to resolve the problem of sharing capacity would be to have an agreement with Luxembourg, a land-locked country that has no coastline but two maritime patrol aircraft. Perhaps we could agree to share its maritime patrol capability, as we have none.

Hugh Bayley: My hon. Friend has made her point well. I would like us not only to make bilateral agreements with other countries but, far more, to look strategically across Europe at how we should restructure our defence industries to eliminate duplication and produce what we need—common equipment on a common basis. We should acquire major capital items of equipment that will be shared in NATO operations on a common basis.
	In the few seconds that I have left, I would like to say a word or two about the local implications of the defence cuts for my constituency and the rest of Yorkshire. The latest figure that I have for the number of regular military personnel based in Yorkshire and the Humber is 14,730; for North Yorkshire the figure is 13,310, and in my constituency of York it is 880. The figures date from 2009, before the general election. If between now and 2015 those figures reduced in proportion with the overall reduction in the numbers of our armed forces—that is, by 8.5% or 9%—one might expect force reductions of about 1,300 across our region, of whom 1,200 would be in North Yorkshire and 70, perhaps, in York itself.
	On the day last week when the Under-Secretary of State for Defence, the right hon. Member for South Leicestershire (Mr Robathan), made his written ministerial statement about the second tranche of redundancies, I tabled a number of parliamentary questions asking for these regional numbers at the time of the general election, in December 2011, and in 2015. At business questions last week I asked whether the Leader of the House could make sure that I got answers before this debate. I received a letter from the Minister with responsibility for defence personnel, but it did not contain the figures. I hope that those figures will be provided to me as soon as possible.

Edward Leigh: I believe that the world is a more dangerous place than it has ever been during my time in Parliament. I believe that it is a more dangerous place than it was during the cold war. That was a more stable situation. We have heard about the resurgent and more authoritarian Russia. China is increasingly muscling its way into various parts of the world. Iran will soon be a nuclear power. The Arab spring might throw up more problems than solutions.
	As a maritime nation, the Royal Navy always has played and always will play an essential part in defending our freedoms. I do not believe that the Royal Navy is a leftover from the cold war or a replay of second world war convoy systems. It is an essential part of our
	defence. I am extremely worried about what is happening to the Royal Navy. It will soon be the weakest it has been since the mid-19th century. In 1982, the Royal Navy was only just capable of retaking the Falklands. I have a list of the appalling casualties that we suffered and the number of our ships that were sunk. We just managed it.
	Since 1997, our armed forces have been cut by 12% and 24,000 people have been made unemployed. Since 1975, the number of cruisers, destroyers and frigates has been cut by a staggering two thirds. The fleet of minesweepers, which, along with the Americans, will be vital in keeping oil flowing through the strait of Hormuz if Iran makes any moves there, has been cut from 40 vessels in 1975 to 15 today. Those are worrying figures.
	We are constantly told that we need larger ships and that we do not need so many. I am not suggesting that we can make direct comparisons with the past or that we should look back to the Royal Navy of 1809, which had a fighting strength of 773 vessels. I remember standing on the deck of a vast American aircraft carrier when I was a member of the Defence Committee and the captain saying, “The ocean is a very large place and I can hide my aircraft carrier.” However, we are faced with enormous problems of piracy and one cannot solve the problems of maritime protection by having just 19 major vessels in the Royal Navy.
	Let us consider the threats that we face. I am not saying that they will necessarily come to anything, but they are there and they are real. Let us compare our strength with that of Argentina. We have seven destroyers and it has five. That is not an overwhelming predominance for the Royal Navy. We have a similar number of aircraft carriers, namely none.

Bernard Jenkin: The importance of aircraft carriers, with their carrier-borne air defence for the fleet and carrier-borne strike capacity, is that one is able to operate away from the home nation. If we fought another Falklands war, it would be all too close to Argentina’s home bases and thousands of miles from ours.

Edward Leigh: That is precisely the point that I was going to make next. If there were a war with Iran or Argentina, we would not be fighting it in the channel. In the case of Argentina, we would be fighting it thousands of miles from any shore-based defence systems. I therefore do not believe that the figures alone give an accurate basis from which we can draw comfort.

Andrew Murrison: It is important to get this matter right in the context of the Falklands, given the activity in Buenos Aires. I accept entirely my hon. Friend’s point about the number of platforms. However, does he accept that the capability of the Royal Navy and the Royal Air Force is immense compared with that of Argentina? In many respects, our potential ability to project force is much greater than it was in 1982 for that reason.

Edward Leigh: I accept some of what my hon. Friend says. However, I pray in aid the recent United Kingdom National Defence Association report, “Inconvenient Truths”, which was written by former defence chiefs. It said:
	“Our assessment is that current force levels are inadequate to hold off even a small-size invasion”.
	Admiral Sir Sandy Woodward wrote in the Daily Mail:
	“The truth is we couldn't defend anything further than the other side of the Channel”.
	Air Commodore Andrew Lambert was quoted in The Guardian as saying that the
	“British public is not aware how thin the ice is…or how bad things could get”
	and that the Falkland Islands are
	“ripe for the picking.”
	I am not saying that I want this to happen or that it will happen, but I am afraid that we in this House must occasionally sound warnings—that is our duty.

Gerald Howarth: My hon. Friend raises concerns that are widespread around the country, particularly in the light of the sabre-rattling by Argentina. However, all the advice that we have received says that the Argentines have neither the capability nor the intention to repeat the folly of 1982 and that the military deterrent we have in place is fully up to the task. I assure my hon. Friend and the House that, in this 30th anniversary year, all of us, as Ministers, are much seized of the matter.

Edward Leigh: I am grateful to the Minister. We pay tribute to him and to his colleagues in the Ministry of Defence for the sterling work that they do and the way in which they have defended the defence budget.
	The Secretary of State said that part of our strategic defence is to have a balanced budget. We all understand that. However, he is using precisely the arguments that were used time and again in the 1930s when people warned of our military weakness and successive Chancellors of the Exchequer argued that we were well defended, rubbished the figures that were being given to them about our military weakness, and said that the most important thing was that the country had a balanced budget.
	We do not blame our right hon. and hon. Friends the Ministers and the Department of State for this. We know that they are fighting their corner; the previous Secretary of State put up a tremendous fight. However, there must be some rebalancing. As my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) said, we are now spending more on winter fuel allowance than on the entire Foreign Office budget. We must have a reordering of strategic defence capabilities, because there is nothing more important than defence. In 1980, the Army had 160,000 soldiers. That number is set to fall to 100,000, and the Government have announced that they want the total strength of the Army to go down to 84,000 by 2020. The Army will have been cut by 12% since 1997. Air Force personnel are being cut from 90,000 to 40,000. Those figures are deeply worrying.
	The previous Government said that 25,000 soldiers, 8,000 sailors and 17,000 airmen were surplus to requirements precisely at the moment when we were fighting two major wars. Sir Richard Dannatt, the former head of the Army, has said that we are facing a situation whereby the Army is massively overstretched and many soldiers are having only one year between operations, with much of that time spent away from
	home. We must appreciate that we live in an increasingly dangerous world. We must, as a House, be prepared to make tough and difficult decisions and be determined to reorder our priorities and say that our defence forces are essential for all our futures.
	I was recently struck by a passage in Martin Gilbert’s book, “Winston Churchill: The Wilderness Years”, that quotes Churchill on the night that Eden resigned:
	“From midnight to dawn, I lay on my bed, consumed by emotions of sorrow and fear. There seemed one strong young figure standing up against long, dismal, drawling tides of drift and surrender, of wrong measurements and feeble impulses. Now he was gone. I watched the daylight slowly creep in through the windows and saw before me in mental gaze the vision of Death.”

John Woodcock: I am not quite sure how to follow that quotation, so I shall confine myself to saying how moving remarks those were.
	I have to confess that I had not intended to speak today, but Members will understand why, in the circumstances, I thought I should stress the importance that my party continues to attach to retaining and renewing the UK’s independent nuclear deterrent.
	I say at the outset that the nuclear deterrent should primarily and ultimately be a matter of national and global security, not of employment. If we could genuinely be confident that the UK unilaterally disarming would make the world safer for future generations of UK citizens, and would make the almost unimaginable horror and destruction of nuclear war less likely, that should of course come ahead even of the thousands of jobs that renewing the deterrent would support in my constituency and the many thousands more that it would support across the country in the supply chain. However, my simple point is that unilaterally disarming would do no such thing.
	If we were to take the view that deciding now not to renew would make the UK safer, we would have to be able to make decisions about the world as we thought it would look in 30 or 40 years’ time. We would also have to believe that the unilateral gesture would pave the way for a change in behaviour by other regimes. On the latter point, disarming would show a fundamental misunderstanding of the motivation of other regimes and groups that seek, or may in the future seek, nuclear capability. They do that to increase their capacity for aggression, not primarily because they fear the UK’s independent deterrent. On the former point, the pace of change has been so great in the past decade that we simply cannot possibly say with confidence that a deterrent will not be needed decades hence.

Thomas Docherty: My hon. Friend is demonstrating that he is probably the most knowledgeable Member on the issue of the deterrent. [Interruption.] I can see that the hon. Member for New Forest East (Dr Lewis) will get me afterwards.
	Has my hon. Friend made any assessment of the Liberal Democrats’ current review of the deterrent and what the pitfalls might be?

John Woodcock: That is a very important point with which I shall deal at some length in a moment. Suffice it to say for the moment that it is not simply the Liberal Democrats’ review; it is the Government’s review. They have commissioned it. The Conservative Under-Secretary of State for Defence, the hon. Member for Mid Worcestershire (Peter Luff), looks like he is in two minds about it, but his own party’s former Defence Secretary sanctioned and announced it. The right hon. Member for North Somerset (Dr Fox), was clearly not booted out because of that particular misdemeanour.
	We have to ask whether it is right for the UK to maintain its independent deterrent. It strikes me as strange that it is often the very people who rail against the hegemony of the United States of America in world affairs who are prepared to sit quietly under its nuclear umbrella and suggest that the UK should not take responsibility for its own defence. I do not include my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) in that comment. I am glad to see him back in his place for my speech—I think.
	We should redouble our efforts to tackle the proliferation of nuclear weapons. I am proud that the previous Labour Government were explicit in setting the ultimate target of zero nuclear weapons—of a world free from the threat of nuclear weapons—but we should not accept the argument that renewal is an act of proliferation. It is not. In fact, non-renewal would be an act of unilateral disarmament. It is right that our party has left those days behind.
	Given the magnitude of destruction that the use of nuclear weapons would inflict, nuclear weapons are rightly an uncomfortable issue for all hon. Members and the country, but they are a deterrent. Our holding of nuclear capability is designed to make a nuclear war less not more likely. So far, that has been successful.

Bob Stewart: To slightly corrupt the saying, if we wish to avoid war, we should prepare for it and have the means to stop it. I fully support what the hon. Gentleman says about deterrence.

John Woodcock: The hon. Gentleman is quite right—he put it far more succinctly than I did and I am grateful to him for doing so.
	I want to stress in the concluding part of my speech that the current Administration are creating a level of risk around the deterrent. That should be a matter of concern to Members on both sides of the House. As an aside, I hope the Minister who winds up could address the matter that was raised this week—

Alison Seabeck: The Minister does not wind up.

John Woodcock: Oh, there are no wind-ups. Perhaps the Minister could find time to intervene in the short time remaining to make something clear. There are significant cuts to the MOD police. Do they mean that there are plans to reduce the MOD police presence at Faslane or Coulport? Would the Minister like to intervene?

Peter Luff: indicated  dissent .

John Woodcock: Okay. If he wants to write and make the position clear at a later stage, that is absolutely fine.

Peter Luff: indicated  assent .

John Woodcock: On the risk that has been created around renewal, the alternatives to Trident review, to which my right hon. Friend the Member for Newcastle upon Tyne East referred, will be led by the Minister for the Armed Forces—it is a shame he cannot be here for the debate. Essentially, the review uses Government resources actively to explore the idea of adapting Astute class submarines for nuclear capability that falls far short of being a deterrent. That could be a cause of increased proliferation and could increase the risk of confusion. If a cruise missile is launched from a submarine at a point of war and the aggressor nation does not know whether it is nuclear or conventionally tipped, the prospects of escalation and horrible consequences increase. The Government have put that in train and we await the review.
	In conclusion, the delay in the proposed in-service date of the successor to the deterrent is—it must be stressed—driven not by national security or primarily industrial concerns, but by a political fudge to delay the vote until the next Parliament. That creates increased costs for taxpayers because the overall cost of renewing our deterrent will increase. In addition, it risks stretching the life of the current Vanguard class submarine to the limit of safe operation. Pressure on the delivery timetable of the successor has been increased by putting political deals above the national interest.

James Gray: If I may be forgiven, I shall not dwell on the welcome recommitment made by the hon. Member for Barrow and Furness (John Woodcock) to the independent nuclear deterrent, which my hon. Friend the Member for New Forest East (Dr Lewis) will have very much welcomed, if not the right hon. Member for Newcastle upon Tyne East (Mr Brown)—who, I am sure the hon. Gentleman will be pleased to hear, none the less looked perfectly benign during his speech. Rather, I would like to focus on more general topics.
	I was very struck, and impressed, by the speech of my right hon. Friend the Secretary of State for Defence. He has been dealt an extraordinarily difficult hand, in the sense that he came into government, discovered a £38 billion black hole in the defence budget and was then required by our right hon. Friends the Prime Minister and the Chancellor of the Exchequer to make defence’s contribution towards balancing the books. However, the purpose of today’s debate is not to consider the great national issues of balancing the books and dealing with the deficit left to us by the previous Government. That is a matter for other times and other people, in a higher position than mine. Rather, our position in this debate ought to be that which was exemplified by my hon. Friend the Member for Gainsborough (Mr Leigh): to consider whether what we are currently doing is the right thing for the defence of the realm. If it is not, the Chancellor of the Exchequer, the Prime Minister and others at a higher pay grade than me will have to explain why they are doing the wrong thing for the defence of the realm. However, we in this debate should
	cast to one side economic constraints—I hope that I am not being naive or difficult in doing that—and instead focus on what we should be doing for the defence of the realm.
	I had the good fortune of being asked to serve on our policy review group before the last election. I was the MP on the group, which was chaired by the noble Baroness Neville-Jones and produced this weighty document, “An Unquiet World: Submission to the Shadow Cabinet”, on which our manifesto was subsequently based. She says on page 8:
	“Capability…needs to be reassessed. An incoming Conservative government should conduct a Defence Review not with the aim of inflicting further cuts, but of ensuring that our armed forces have been asked to do the right job, are properly equipped and trained and are employed on the right terms and conditions.”
	Elsewhere in the report she says:
	“Defence Reviews tend to strike dread into the hearts of those involved or affected,”
	because of the likelihood of cuts, although this is
	“not a necessary outcome and not one this Policy Group would wish to see.”
	In other words, the policy group on which I served, and which informed the manifesto of my party, took the view that there should be a defence review, but that it should not necessarily involve defence cuts.
	The reality, of course, is what we have seen since, which the Secretary of State laid out plainly in his speech. Indeed, it rather reminded me of a speech by a chairman of a multinational company explaining to shareholders that things were not all that great and that he would have to make some cuts to the company, but that he very much hoped that dividends would once again start to be paid in the years to come. It was an accountant’s speech, rather than a defence speech. I do not blame him for that: that is his job. None the less, I have the great luxury of being a Back Bencher and being the chairman of the all-party group on the armed forces. I therefore feel it right to speak up for the armed forces, even if that were to upset those on my own Front Bench, which is not something that I would ever seek to do, as I know my hon. Friend the Minister would agree.
	The first thing to say is that the only certainty in the defence world is uncertainty. We never know what is going to happen next. Who would have predicted the Falklands? Who would have predicted Saddam’s invasion of Kuwait? Who would have predicted 9/11 or 7/7? Who would have thought that we would simultaneously be fighting two wars, as we were recently in Afghanistan and Iraq? Who would have predicted Libya, Kosovo, the Balkans or Sierra Leone? None of them was even remotely predictable—nor, of course, was the second world war or the first world war, which was sparked off by the assassination of the Archduke Franz Ferdinand in Sarajevo. Unpredictability is the absolutely highest certainty in defence.
	Against that background of uncertainty, let us think about what we are facing today. Who knows what Iran will do? We could see further activity from the Iranians within weeks—there is a threat to block the straits of Hormuz. Israel is threatening pre-emptive—nuclear, potentially—action against them. The whole Palestinian question remains unanswered, and Syria is in turmoil. We have no idea what is going to happen in Egypt, despite the lifting of the state of emergency, and Pakistan is on the brink of collapse. We do not really know what
	is going on in Libya; there is certainly a bit of a vacuum there. The situation in Afghanistan is uncertain, and Iraq is close to meltdown. We are living in an incredibly dangerous and uncertain world, and we should be preparing our defences for that uncertainty.
	So what are we actually doing? The hon. Member for York Central (Hugh Bayley) was right to say that Labour Governments tend to spend more on defence than Conservative ones; that is historically accurate. I very much regret to say that my great party is announcing an Army that will be the smallest since the Crimean war. Some define an army as a body of 100,000 soldiers. It is therefore arguable, depending on how one uses the word, that in the near future, Great Britain will no longer have an army; it will have only a defence force. As a Back Bencher who does not labour under the great considerations of state, I am able to say to the House that that would be a disgraceful situation, given the uncertainty that we are facing. The Royal Air Force is being cut in half; the Navy is being emasculated. It is my view that this country no longer has the capability to do the things that we have always done.
	Why should that be the case? I want to quote a previous Prime Minister, who shall remain nameless. He said to me, “I went to see the teachers, and they told me to get lost. I went to see the doctors and nurses, and they told me to get lost. Then I went to see the generals. They saluted, turned to the right and marched off, saying, ‘Whatever you say, Prime Minister. I will happily carry that out.’” That is precisely what is happening now. Whatever task is put before our armed forces, they will find a way to do it—they are a can-do organisation—but should we be asking them to do it?
	In the 15 years that I have been in this place, we have talked, in these dusty Thursday afternoon debates, about overstretch and about the fact that the armed forces were unable to carry out their duties. We blamed the Labour Government for all that, but I now find myself speaking from the Government Back Benches and making precisely the same arguments as those I have made over the past 15 years. I do not believe, given the cuts that we are now facing, that we will be able to carry out our moral duty to lead the world and to intervene for good around the world. We are hampering ourselves in that regard.
	For that reason, I believe that defence spending and budgets should be separate from those of schools and hospitals and from other parts of the national budget. We have a moral duty to do certain things in the world, and we should not allow our economic situation to prevent us from doing them. I regret to have to say that I am at odds with my own party on this great subject. We should find a way to maintain our defence spending at a level at which we, as a nation, can punch above our weight.

Thomas Docherty: It is an absolute pleasure to take part in the debate, and I commend our Select Committee Chairman, the right hon. Member for North East Hampshire (Mr Arbuthnot), for his work on securing it. It is also an absolute pleasure to follow the hon. Member for North Wiltshire
	(Mr Gray). I found myself agreeing with pretty much everything that he said, although I would suggest that many people did see the second world war coming. That was his only example that perhaps fell down slightly.
	What I find amazing about the Defence Committee’s work is not only the bipartisanship under which it operates under the chairmanship of the right hon. Member for North East Hampshire but the breadth of knowledge of its members. We have seen that illustrated again today in the contributions from the right hon. Gentleman, from my hon. Friend the Member for Bridgend (Mrs Moon) and from others. We produced a report following our forensic investigation into the strategic defence and security review, and our conclusions were clear and damning. We concluded that the SDSR was a Treasury-driven budget settlement that would have dreadful consequences for the defence of the realm; it would be dreadful for the morale of service personnel, and for UK manufacturing.
	The decision on carrier strike capability was rushed and bizarre. On the question of the air frame, it is perfectly reasonable for the Government to consider whether the F35-B was the correct choice in the context of Future Force 2020. After all, the United States had placed the B variant on probation, and there were technical concerns about the lift. My understanding is that, at that time, only the United Kingdom and the United States had signed up to take an order. It is also valid to argue that we should consider the question of interoperability with our allies, as well as the value for money of the air frame to be chosen. Those are all reasonable elements that a sensible Government should examine.
	Unfortunately, the Government did not bother to take the time to understand the consequences of the decision to switch variants. For example, the F-35C cannot land on the French carrier, thus defeating the argument of interoperability, particularly given the Anglo-French alliance. The cost of the F-35—B and C—is still not known, and that is a concern shared by the Defence Committee and our counterparts in the United States Congress, the Pentagon, the Canadians, the Australians and every other country that is purchasing either the F-35B or C.
	Lastly, many of us do not have confidence that, most crucially, the F-35C will be able to land on the Queen Elizabeth class carrier. It would be a good idea if it were able to come down safely to our own carrier, although perhaps I am a bit of a traditionalist.

Madeleine Moon: Is the hon. Gentleman aware that Admiral Sir Trevor Soar, Commander-in-Chief, Fleet, said in a speech to industrialists in the US that, due to the US defence cuts, the chance of us being able to buy the joint strike fighter are reducing, as it will not be delivered on time? As alternatives, we will have to look at the F-18 from the Americans and the Rafale from the French.

Thomas Docherty: My hon. Friend is right. The Times paints a disturbing picture today. We on the Defence Committee and the wider defence community have for some time had serious concerns about the capability of Lockheed Martin to fulfil the aspirations set out. When the Minister appeared before the Defence Committee, it was disturbing that he adopted a relatively blasé approach to the problem, in direct contradiction to the postures
	of Secretary Gates, who has already been name-checked, and Secretary Panetta, who have been turning the screws on Lockheed Martin. As the decision has been rushed, we might have to go back and reverse it, and go to the F-35B, which would be not only embarrassing but a vast waste of money. We have only two other options: as my hon. Friend says, the F-18 Super Hornet, a proven air frame, of which the Australians have just ordered additional quantities, and for which Secretary Panetta has announced an additional order, or the French variant, which, to be fair, would at least solve the Charles de Gaulle issue.
	On the carriers themselves, it is no secret that I have absolute scorn for the decision that was taken to take the Invincible class out of service. In fact, despite the claim of a minority on the Government Benches that the Libyan operation justifies the decision, the reverse is true, as it demonstrates absolutely the need for carrier capability throughout the decade.

Gerald Howarth: indicated  dissent .

Thomas Docherty: The Minister shakes his head. Perhaps it would help him if I were to quote the commander of the Italian navy, Rear Admiral Treu, who said:
	“Libya is really showing that these aircraft”
	the Harrier—
	“and their carrier are needed. They are five minutes from the operational zone, which reduces fuel consumption and wear and tear. With less reliance on in-flight refuelling, it is easier to do dynamic tasking and shift operation, and they cost less to operate than Tornados and Eurofighters”.
	I have the greatest respect for the Minister and I know he cares passionately about the future of aviation. He has been a strong voice in the Government—dare I say, one of the few strong voices for the defence industry in the Government—but what does he know that our First Sea Lord, our commanders in the field and our allies do not?

Gerald Howarth: I am most grateful to the hon. Gentleman for his kind tribute, although I am not sure whether it will be career enhancing. Nevertheless I will take it in the spirit in which it was given. Of course carriers would have been advantageous, but they were not necessary in the circumstances of Libya. The Government are going ahead with the Queen Elizabeth and Prince of Wales carriers precisely because we understand the need for carrier strike. We had endless debates about that in the SDSR and we came to that conclusion, which is the right one in my view. In Libya, however, we did not need carriers; HMS Ocean did a great job for the Army Air Corps Apaches.

Thomas Docherty: I am most grateful to the Minister. He is obviously very clever, because he has led me straight on to my next point, which is about the replacement for the Invincible class, the Queen Elizabeth class aircraft carrier. He perhaps forgot to mention that, even some time after 2020, when we eventually get a functioning aircraft carrier, it will only be part-time. We will only be able to operate it for perhaps 150 days of the year, so we must be really hopeful that those who seek to attack us only do it on the five or six months a year when we are able to respond. It reminds me of Asterix the Gaul and
	the scene where he comes to Britain and the British have gone home at 5 o’clock to have their tea. That is pretty much the kind of part-time navy that we will have if the Minister gets his way.

Tobias Ellwood: I was hoping to resist the temptation to intervene, but I want to back up my hon. Friend the Minister and put in perspective the hon. Gentleman’s argument. He is trying to get into the tactics of how a battle is operated. What does he want to fly off these aircraft carriers? I am afraid his Government got rid of the Sea Harriers, so he would not be able to use the Storm Shadow, the Brimstone or any of the guns, because the Harriers did not exist—[ Interruption. ]

Thomas Docherty: I am going to continue with my speech, because it is my time that I am sacrificing. The hon. Gentleman tries to make it a false choice, as he always does, but he was at the heart of the decision making. Let us not forget that he was the Parliamentary Private Secretary to the former Secretary of State. It was his bright idea, I suspect, to get rid of the carrier, because the other Ministers are all far too clever to do that.
	The choice between Typhoon, Tornado and Harrier is a false one. I have never accepted and the Defence Committee has never accepted the false choice made by the current Government, following the Treasury-driven cuts. We will see price gouging and there will be a significant rise in the cost of the Queen Elizabeth class carrier, not because of the Aircraft Carrier Alliance—I have some fantastic workers in my constituency, whom the Ministers and others have been to see, and they are delivering in Plymouth, in the north-east, on the Clyde and over at Birkenhead—but because of the rushed decision. We will have to buy cats and traps off-the-shelf from the Americans at a price-gouged cost of up to £2 billion because due diligence was not done on whether it would work. The prices are going up because of the short-term decisions. We have no idea how we will refuel the aircraft because of the decision to switch from the short take off, vertical landing—or STOVL—variant to carriers and that will also involve significant costs.
	In the last minute of my time, I want briefly to talk about Scotland. The Scottish National party is not here today because its Members have gone into hiding. The SNP defence policy unravelled last week within hours of its being unveiled. Sheer anger was felt by communities around Scotland at the betrayal by that party, which, after years of claiming that Scotland did not receive what it called its fair share of spending, has admitted that it would spend even less on defence. After campaigning, as the SNP claimed, to save RAF Leuchars, it has announced that it would close RAF Leuchars and RAF Kinloss. In a separate Scotland, there would be no Rosyth dockyard and no Clyde shipbuilding. Companies would be pulling out of Scotland. There are also serious concerns for the rest of the United Kingdom. How would we deliver the deterrent? How would we secure the high north? How would the military be put together?
	I hope that one of the Committees of the House will find an opportunity in the months ahead to scrutinise those very important issues.

Andrew Murrison: I declare my interest as a member of the reserve forces.
	I congratulate the Backbench Business Committee on introducing this important debate and my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) and his Committee on their timely report, published this week. I read it with great interest and if I have any criticism of it I would have to start with the fact that it perhaps does not sufficiently recognise two rigorous and well-regarded studies, the Levene report and Bernard Gray’s report, which set the scene for many of the points that it raises. In May 2010, of course, the coalition Government inherited the extremely difficult task of bringing some order to a chaotic defence budget.
	The Gray report was leaked to the electorate before the general election, so voters such as those in my constituency, which has a large defence interest, had the benefit of seeing it, as did I. The previous Government might well have tried to delay the publication of the report because the word “grotesque” reflected some of the real horrors in Defence Equipment and Support that were unearthed in the dying days of Labour’s 13-year stewardship. Bernard Gray told us that the MOD was running a “substantially overheated equipment programme” and that the sclerotic Department was hampering our ability to conduct difficult current operations. He went on to say:
	“The problems, and the sums of money involved, have almost lost their power to shock, so endemic is the issue.”

Kevan Jones: But do I not remember the hon. Gentleman arguing from the Front Bench for more ships, larger armies and more aircraft?

Andrew Murrison: The hon. Gentleman will also remember that Bernard Gray was a special adviser to his party. In that context it is quite important to note that the report was produced by a supporter not of the Conservative party but of his party.
	The gap between the programme and the budget in May 2010 was a truly grotesque £38 billion. Also grotesque is the disarray over how to deal with the crisis among those who masterminded it. We heard examples of that today from the shadow Defence Secretary. He says he supports only £5 billion of Government cuts, but the shadow Chancellor says that the Labour party would keep all the remedial spending reductions that the Government are making. The figure of £5 billion is interesting because the shadow Defence Secretary also said today that it would be invidious in advance of a general election to try to work out what the requirement would be in personnel and equipment. It is therefore difficult to work out how he came up with the £5 billion figure, even assuming it is correct. The isolation of the Opposition is increasingly apparent as even the United States reins in its defence spending to deal not with an incoherent defence budget but with a crippling federal budget deficit.

Thomas Docherty: I think I am right in saying that the US is still increasing its defence spending, not cutting it. Is that correct?

Andrew Murrison: No, I do not think it is correct. America has made it clear that over the spending period it will have to reduce its defence spending.

Thomas Docherty: Slowly.

Andrew Murrison: Well, the rate will decline—of course it will.
	We gained some insight into how the disconnect between programmes and the ability to pay for them arose last summer when Lord Levene delivered his verdict on the MOD. His revelations dovetailed disquietingly well with Gray’s. He found a “bloated top-level defence board” supervising a
	“department with overly bureaucratic management structures, dominated by committees leading to indecisiveness and a lack of responsibility.”
	Last year, the armed forces covenant was written into law for the first time, as the Prime Minister said it would be. The covenant is not just about the compact between troops and the public. It also concerns the deal between troops and the high command. Those in charge betray the covenant if they allow the kind of shoddy, top-level management evidenced by both Gray and Levene. However, we still have nearly 500 one-star officers and above—a whole battalion of senior officers on packages well in excess of £100,000. Defence Medical Services is a good case in point. To oversee the care of a patient population less than half the size of Wiltshire we require one three-star, five two-star and 15 one-star officers who serve not as doctors, dentists or nurses but as administrators. Our top medic in Afghanistan is not among them—he is just a colonel. I commend the Government for the remedial measures announced before Christmas to reduce the number of starred appointments, both uniformed and civilian.
	More generally, I note that although there here have been and will continue to be compulsory redundancies, the package is so reasonable that there has been disappointment among many of those not selected, as there was during previous rounds. From experience, I bear testament to that.
	It is of course reasonable to flex personnel from one trade to another—a contention, I think, of paragraphs 67 to 70 of this week’s Defence Committee report—but the majority of pinch-point trades are so specific by rank or extent of retraining necessary that it would actually be quite difficult to do so. Flexible though our young people are, we simply cannot ask an infantryman to become an Intelligence Corps linguist, a pharmacist at the rank of captain or a Cat. A nuclear watchkeeper.
	In our collective defence, NATO remains paramount. However, I share widespread concern that we are moving towards a two-tier alliance, with some players benefiting from the cover but not paying the premium. At next week’s meeting of Defence Ministers in Brussels, will the Defence Secretary continue to press our allies to meet their proper financial responsibilities? Present at the meeting will be those who press for an increasing EU defence identity as part of the security and defence policy. Naturally, that has nothing to do with defence, which only the UK and France come close to funding properly.
	The latest turn of the screw comes from a European Parliament resolution of 19 February 2009, which proposes something called synchronised armed forces Europe.
	SAFE is a beguiling but deeply ironic acronym. Under SAFE, alarmingly, British servicemen would owe allegiance to the supranational European Union. One of its cheerleaders, the German Foreign Minister, Guido Westerwelle, told the Munich security conference in February 2010:
	“The long-term goal is the establishment of a European army under full parliamentary control.”
	Of course, that has nothing to do with improving our collective security; instead, it draws from a hubristic, maladroit pan-European political project that has brought us to the brink of economic catastrophe. The immediate concern about SAFE is that it would quite deliberately remove the capability of the two European nation states still able to act independently to project force worldwide on their own, or with partners of their choosing, in pursuit of the national interest.

Jeremy Lefroy: Does my hon. Friend agree that it is somewhat ironic that those calling for a European army and united European defence are the very people who refuse to pay up for it in their own country?

Andrew Murrison: My hon. Friend is absolutely correct. It may not be by chance that the Germans are chief among those who wish to shelter under a European defence force, because Germany, of all our allies and friends, is the country one can most easily identify as a major economy that does not pay its way in terms of our collective security, which it so obviously enjoys. When the Minister is in Brussels, I very much hope that he will do everything he can to put pressure on the Germans in particular to make a fuller contribution to our collective defence; but it has to be through NATO, not through the European Union. The lesson of the past few years and the difficulty with the European Union in respect of our economic position—the greatest existential threat the UK faces at the moment—is that we cannot rely on Europe for our security. Our cornerstone has always been NATO and it will continue to be.

Gerald Howarth: I assure my hon. Friend that whenever I represent Her Majesty’s Government in Brussels I clearly make the point that NATO is a cornerstone of our defence and that other nations should jolly well divvy up in their own defence.

Andrew Murrison: I thank the Minister. Recent activity in the south Atlantic has shown us that the threat from a Government playing to a national gallery has to be addressed.

Nigel Evans: Order. The hon. Gentleman’s time is up.

Lyn Brown: On a point of order, Mr Deputy Speaker. I have informed the office of the hon. Member for Harrow East (Bob Blackman) that I intend to raise this point of order. This morning at business questions, the hon. Gentleman told the House that Ken Livingstone intends to overturn the ban on drinking alcohol on public transport in London. That is simply untrue; Ken Livingstone will not overturn the ban on drinking alcohol on public transport. I wonder, Mr Deputy Speaker, whether you have had any indication whatsoever that the hon. Member for Harrow East intends to come to the Chamber to correct the record.

Nigel Evans: I thank the hon. Lady for notice of her point of order, and for contacting the Member’s office. Right hon. and hon. Members are responsible for their own comments but should make every effort to ensure that they are accurate, and I am absolutely certain that the attentive Whip on the Treasury Bench will bring the point of order to the Member’s attention.

Rory Stewart: The greatest damage to our nation over the past 10 years has not been done by the enemy: it has been done by ourselves. And it has not been done, contrary to what we often believe, by what we have not done. It is not the result of the money we failed to raise, the equipment we failed to purchase or the actions we failed to take. The damage that we have inflicted on ourselves comes from our decisions to get involved in theatres such as Iraq, and Helmand in Afghanistan.
	The gap, the fundamental problem, with the SDSR—it was true of John Nott’s review in 1982 and Lord Robertson’s review in 1998 and it is true of our review today—is a gap of strategy. It is a gap of thought. We are spending over £30 billion a year on a military without developing the policy and strategic capability to decide where we are prepared to be involved, and what, fundamentally, our national interests should be. Our national interest is dependent, above all, on two things: an understanding of what our priorities are and how to match our resources to those priorities, and an understanding of our limits—what we cannot do.
	What is striking about Lord Robertson’s report is that there he is, in 1998, making confident statements about Britain’s future and the risks it faces—confident statements about weapons of mass destruction and terrorism—but the proof of the pudding was in the eating. We then launched ourselves into Iraq and Helmand, and in doing so took on issues that did not match our national interest.
	What is the solution to that problem? The solution, first, is to understand that our model of policy making is at fault. The military, rightly, have a very traditional view of policy making. They imagine that politicians define the national interest, the Foreign Office creates the policy framework and the generals advise and then implement the policy—perhaps giving operational advice on how to implement that strategy. The reality is, of course, quite different. The world has changed. We need to recognise that; the military need to recognise that; the SDSR needs recognise that. The reality is that although in constitutional theory it is the politicians who make the decision and the Foreign Office that provides the policy framework, in practice the strength, the authority and the charisma of the senior military is higher today than it has been at any time in British or American history.
	To see that, one needs to look only at the experience of President Obama dealing with General McChrystal in 2009. What, in effect, happened is that McChrystal issued a report in 2009, saying he needs 40,000 more troops. The President of the United States attempted to respond. He went into a nine-week consultation process, at the end of which, entirely predictably, he could do only exactly what his General requested, but a little bit
	less—give him 35,000 instead of 40,000. And yet the assessment was disastrous. In the small print, General McChrystal says, “I need 40,000 troops but my strategy will never work unless the Afghan Government sort their act out. And by the way, I, General McChrystal, am not responsible for sorting out the Afghan Government; that will be done by somebody else. It will be done by the State Department. It will be done by USAID.” Yet nobody appears to be able in the system to challenge him. Why not? Although theoretically the politicians have the decisive ability and the policy is owned by someone else, nobody is going to face down a man with a row of medals on his chest who has served six years on the ground in Iraq and Afghanistan and who says, “This is what I need.” No Democrat President and, I would suggest, no politician in Britain today would have the authority and confidence to disagree with such a man.
	What is the solution to that problem? It is that we spend more money and invest far more in a policy capacity whose primary function is to keep us out of wars—to make it more difficult for us to engage in disastrous and costly adventures of the sort we have seen in the past decade. That means, above all, investing in the Foreign Office, which needs to remember that its function is fundamentally policy and politics. It is about understanding exactly what is happening in a particular country, so that if a Prime Minister were to suggest, for example, that he wished to invade Iraq, we would not have the situation we had last time in which not a single senior serving diplomat in the Foreign Office in London disagreed in any way with the Prime Minister’s statement. That happened because we did not know anything; we had not invested in knowing anything. We did not have diplomats on the ground and our intelligence assets were very limited.
	The military imagine, quite rightly, that they exist in a context in which other people will disagree with them. They feel embattled and that they have to challenge civilians—that they have to thump the table and demand things. They assume that somehow Prime Ministers or diplomats will push back against them, but that push-back does not happen. We could help not only by having more political focus and more diplomats and embassies focused precisely on these issues, but by insisting that every batch of young diplomats has at least one or two members of the foreign service who are posted to the military for one or two years at the beginning of their careers, not posted to staff college at the age of 40. They should be sent on the equivalent of a gap-year commission or national service, so that we begin to redevelop what we had instinctively in the 1950s, ‘60s and ‘70s, which is civilians who understand both the strengths and the weaknesses of the military.
	The military in the meantime need to understand that that context does not yet exist and that they cannot expect the Foreign Office to have the confidence or the resources to push back against them. General McChrystal, to return to the less controversial ground of the United States, should be producing reports saying not, “I need 40,000 troops to win,” but, “Unless somebody sorts out the Afghan Government, and I see no evidence that anybody’s going to do that, there’s no point giving me 40,000 troops because I’m not going to be able to win.”
	In other words, in the absence of a real civilian check, the military are going to have to provide that check themselves.
	Why is that relevant to the strategic defence review? Without that form of analysis and intelligence and policy work, we will not have a definition of our national interest. Without a definition of our national interest, we cannot have a strategy. Without a strategy, there is no point having a strategic defence review.

Jeremy Lefroy: It is a great pleasure to follow my hon. Friend the Member for Penrith and The Border (Rory Stewart), to whom I listened with great interest because he has such vast experience in these matters.
	Before I had the honour to be elected to this House, I was involved with others in setting up a business in Sierra Leone. We were able to do that only because the British Army had been involved in bringing stability and peace to that country, and I give credit to those in the previous Government who made the decision to get involved, and to all those who took part in the operation. It is clear that the conditions prevailing in Sierra Leone today were made possible only by British action.
	In setting up a business in that country, it was great to be able to offer jobs to former child soldiers, who could then, instead of terrorising their neighbourhoods, earn a living. Is not one of the great benefits that the British armed forces are able to bring, as a result of the intervention in Sierra Leone, that experience of training that enables a country to live at peace, and enables people who were involved in murder to start to earn a living and look after their families?
	I want to concentrate my remarks on the connection of our armed forces with their local communities—with the towns, cities and counties in which they are based. Despite the major changes that the SDSR has brought about, and will continue to bring about, these connections must be maintained and strengthened. Never was that brought home to me more clearly than in two recent homecoming parades through my town of Stafford by the Queen’s Royal Lancers and the 3rd Mercians, the Staffords, on their return from their tours of Afghanistan in the last 12 months or so. Both those regiments have strong connections with Staffordshire, and many people from the county and the city of Stoke-on-Trent serve in them. They paraded through many other towns in the area—I see my hon. Friend the Member for Lichfield (Michael Fabricant) nodding in agreement. The people of Stafford turned out in great numbers for those parades, and showed just how much they respect the service and sacrifice of the men and women of our armed forces.
	There are many ways to strengthen the bonds with communities, and I want to touch on just three. The first is to integrate local bases more into the community—while respecting, of course, security considerations. In Stafford, we are fortunate to be the home of 22 Signal Regiment and part of the tactical supply wing of the Royal Air Force, and we eagerly anticipate the coming of two more signal regiments from Germany from 2015. The people of Stafford recognise the great benefits that that will bring to our town: first, the coming of more servicemen and women and their families, who will receive a very warm welcome; secondly, the expansion
	of schools to meet the needs of their children; and thirdly, the prospect that those skilled men and women will wish to stay in the area when they retire from the armed forces and contribute to our emerging ICT industry and others. There are other opportunities for joint working too: shared sports facilities, advanced skills training, housing and health. We must never forget that the prime duty of our armed forces is the security of the United Kingdom, but no small part of the stability of the UK is the fact that our armed forces are seen as part of the communities that they serve.
	Secondly, there is the role of our reserve forces, and I pay tribute to the number of right hon. and hon. Members of this House who serve, many of whom are here today. I also pay tribute to the work of my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) and his team for the vital work that they have done in the Future Reserves 2020 study. He deserves great credit for that.
	The increase in the proportion of our reserve strength to 30% of the total is a significant change, but as the review recognises, it will simply not be possible without both modernisation and funding. That is why I welcome the Government’s commitment to better integration with the regular force and increased funding, which I had understood was £1.5 billion, but I was delighted to hear the Secretary of State mention a figure of £1.8 billion in his speech.

Andrew Murrison: Does my hon. Friend agree that not only are our reserve forces head to head cheaper than members of the regular armed forces, which is important in the current environment, but also that other countries have far more reserves as a proportion of their total defence capacity?

Jeremy Lefroy: My hon. Friend is absolutely right, as always. I believe that in the United States it is at least 30%, if not 35%, yet here it is less than 20%, so we are well under the average, even compared with fine armed forces such as those of our NATO allies in the United States and elsewhere.
	But as the review points out, we must use the specialist skills that our reserve forces have. In the proposed rationalisation of the defence estate, we must ensure that we do not to lose the close connection between the reserves and the communities from which they come. The Government’s response to the review points out that connection as one of the benefits of increasing the size of the reserves. One way to do that is for the Ministry of Defence to work closely with local councils and councillors throughout the changes that are being made, so that they are kept fully informed.
	Finally, I wish to say a few words about the cadets. I have been fortunate enough since my election to spend some time with the Army and RAF cadets in my constituency and my county. Last month I joined the hon. Member for Stoke-on-Trent South (Robert Flello) at the winter camp of the Staffordshire and West Midlands North Army Cadet Force at Swynnerton in the constituency of my hon. Friend the Member for Stone (Mr Cash). What impressed me most was the commitment of the 500 or so adult volunteers, the full-time staff and the young people. It was a bitterly cold and icy weekend, but the full programme went ahead when other organisations might well have cancelled. When I spoke
	with the young people from Wolverhampton, Walsall, Stoke-on-Trent, Cannock—as I am sure the Minister knows—and Stafford, they said that the ACF gave them purpose and opportunities that they would not otherwise have considered or had the chance to take up.
	We must never underestimate the value of the cadets. Last year they jointly celebrated their 150th anniversary, and their popularity is as great as it has ever been, with some 130,000 cadets in 3,200 units across the UK—no doubt in every constituency—and 25,000 adult volunteers giving up many hours of precious free time each week to help young people develop skills and make the most of their lives. I ask my right hon. Friend the Secretary of State to do everything possible to support the cadet forces. Their work is very much part of the big society, and shares the values of the national citizenship service by bringing together young people from all walks of life and all backgrounds.
	Whether it is through the regular forces or the reserves, the bonds between our armed forces and the communities from which they come or in which they are based must not be underestimated. These bonds, along with the courage and commitment of our armed forces, are the cornerstones of the respect in which they are held. Our cadet forces have a different but equally valuable role: offering our young people opportunities to learn and work together that they would not otherwise have.

Several hon. Members: rose —

Nigel Evans: Order. I am reducing the time limit on speeches to seven minutes.

Julian Lewis: I, too, congratulate my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on initiating the debate, and the Backbench Business Committee on choosing it as today’s topic. I was particularly pleased that my right hon. Friend started the debate by emphasising the unpredictability of future conflicts, a point re-emphasised in the strongest possible terms by my hon. Friend the Member for North Wiltshire (Mr Gray). Having listened to the Secretary of State for Defence today, I believe that what he is trying to do is create a balanced budget without sacrificing the aim of having the balanced forces that we need. That is a necessary approach, and we should resist the temptation to say that we ought to sacrifice particular capabilities forever, simply because we cannot conceive at this moment of going to war, or entering some lesser conflict, unless we are in coalition with allies.
	I was impressed by some of the remarks made by the hon. Member for Bridgend (Mrs Moon), who pointed out the gaps in capability resulting from the cancellation of the Nimrod MRA4. In a later intervention she referred to the problems relating to the loss of fixed-wing aircraft carrier aircraft capability. If we acknowledge the certainty that we will be unable to predict the vast majority of cases in which we shall need to send our armed forces to war, and couple that with a restricted budget, which means that we will often have to choose either what is commonly and derogatorily called salami-slicing, or abandoning certain capabilities permanently, I believe that the salami-slicing approach, unpleasant though it is, is broadly the correct one—because we do
	not know when, where, against whom or how we will have to go to war. We cannot predict which of the vast range of military capabilities that we currently have we will need to use. Therefore, in straitened economic circumstances when we cannot afford to spend as much on defence as we would like to, and as indeed we feel in our hearts we ought to, we must nevertheless preserve what are called “nucleus” forces, which give us the potential when the need arises to expand on the capabilities that we have retained, even though at any given time those capabilities have seemed to be inadequate.
	In that connection, if Ministers are working within an economic envelope—that is not the best terminology to use, but it has been used today so I shall continue with it—in times of peace, we can all understand that, but, whenever we end up in a serious armed conflict, those economic considerations are always relegated to second place, and Ministers simply have to put aside considerations of affordability in favour of the absolute necessity of taking the measures which that conflict situation requires them to take.
	It is now just over 30 years since my hon. Friend the Member for Gainsborough (Mr Leigh), a gentleman called Councillor Tony Kerpel, a former chief of staff to a former chairman of the Conservative party, and I set up a coalition. It was not quite the sort of coalition that we have today, which, as hon. Members may know, is so close to my heart; it was the Coalition for Peace Through Security, and its purpose was to fight for the changeover from Polaris to the first generation of Trident and for the deployment of cruise missiles in Britain so that eventually we would be able to negotiate a deal, which we did in 1987, to get rid of intermediate nuclear forces on both sides of the iron curtain in Europe.
	I am therefore very happy to reassure the hon. Member for Dunfermline and West Fife (Thomas Docherty), in his absence, that I do not feel at all proprietorial about the arguments in favour of the nuclear deterrent. I am absolutely delighted when people such as the hon. Member for Barrow and Furness (John Woodcock), who I know had not intended to speak today, rise to their feet and defend it with such vigour.
	I was pleased, but I shall look very closely at Hansard tomorrow to see exactly what the shadow Secretary of State said when I asked him to clarify and confirm his party’s commitment to the renewal of Trident, and in particular to the successor generation of submarines. I invite my hon. Friend the Minister, given that the Secretary of State did not refer to it, to clarify our own position on that very subject.

Gerald Howarth: Prompted by my hon. Friend, I am delighted to say, as he will know, that in the SDSR and in our Trident value-for-money review the Government committed to renewing the independent nuclear deterrent: submarine-based, continuously at sea, patrolling. That programme is being taken forward. Initial gate was in May last year, and I assure him that all the work is continuing and in progress. If I may, I also take this opportunity to salute my hon. Friend, my hon. Friend the Member for Gainsborough (Mr Leigh), and Tony Kerpel on the then coalition, because I supported it at the time and am delighted to be in government supporting it now.

Julian Lewis: I thank the Minister for those very generous comments, but we are very short of time, so I am now going to truncate my remarks.
	I shall say just a brief word about the masterly exposition by my hon. Friend the Member for Penrith and The Border (Rory Stewart). He always grips the House with his expositions, but the trouble is that I do not always find that I can fully endorse their contents, even though I am fascinated by the elegance and fluency with which he advances them. I share his view, and always have, that the micro-management of the country of Afghanistan is a mistake on the part of the NATO powers—but, whatever happens in America, I find it a little difficult to recognise the idea of generals in this country being somewhat out of control, and pursuing a military agenda with the Foreign Office trailing in their wake. My only point, which I will be happy to discuss with my hon. Friend afterwards, is that when the archives about the decision to go into Helmand are opened, we will probably find that that decision was ultimately taken—and, I suspect, mainly driven—by politicians rather than by generals or diplomats. I may be wrong; history will have to decide.

Christopher Pincher: It is always a great pleasure to follow my coalitionist hon. Friend the Member for New Forest East (Dr Lewis). I congratulate my right hon. Friend the Chairman of the Select Committee on organising the debate. I also congratulate the Secretary of State, not only on taking his place today but on making a speech last December at the Royal United Services Institute about the importance of sustained armed forces. That was very powerful.
	Rather counter-intuitively, I also congratulate the shadow Secretary of State on his rather temperate speech. Although he is not here, I advise him in all candour not to be too kind and friendly to the Government, because hungry hounds are snapping at his heels. As he admitted himself, it is unwise to incur the wrath of the shadow Chancellor.
	I want to focus on one particular aspect of the strategic defence and security review. We have heard from colleagues across the House about the importance of the continuous at sea nuclear deterrent. We have also had a tour d’horizon of the 1930s, the foreign service and boots on the ground in Afghanistan. I hope that when Ministers go back to the MOD they will also reflect on the importance within the SDSR of energy security.
	The SDSR and our energy supply are intimately connected. A decade ago Britain was self-sufficient in energy; in just eight, nine or 10 years’ time, 80% of our energy will be imported. The same thing is happening around the world. China, Malaysia and India have a massive appetite for energy. China consumes 12% of the world’s energy—a 25% increase in the past 10 years.
	That means that scarce resources, which we tend to find in the most unstable and unreliable regions and regimes in the world, are becoming scarcer. Petro powers such as Russia recognise that; they are prepared to use their energy resources as the provisional wing of their diplomatic and military capability. Russia had an argument with the Ukraine a year or two ago, so Russia reduced the energy supply to that country. That meant that the
	energy supply to parts of Europe was reduced by a third. That situation has a significant impact on our strategic partners in Europe, and we should make sure that such considerations are factored into our SDSR.
	Terrorists also recognise the importance of energy. Look at the strait of Hormuz: every day—today, tomorrow and for the rest of this year—14 supertankers carrying 17 million barrels of oil, which is 20% of the world’s daily supply and 35% of the ongoing seagoing supply, go through the strait. That is a massive tempting target for terrorists. I hope that the MOD recognises the importance of protecting those transport routes and diversifying oil supply so that those tempting targets do not dislocate the energy supply of the world. The fuel that goes through the strait of Hormuz goes largely to the east, to India and China—countries that are absolutely essential to the restitution of the economy of the world. It is important that that particular part of the world, and other choke points, are properly defended. That should be factored into our SDSR.
	Lastly, let us think about refining capacity. As the hon. Member for Ynys Môn (Albert Owen) said during Energy questions today, outside Saudi Arabia there is precious little extra refining capacity. That presents another tempting target for terrorists. Osama bin Laden said that refineries represent the hinges on which the economy of the world hangs. I trust that the Minister will reflect on that and make sure that in our SDSR the protection of refineries and the development of extra refining capacity are on our agenda.
	Yesterday, at the Select Committee on Energy and Climate Change, the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) said something that struck many Members powerfully. He said that the Government would not compromise on the protection of our energy security. I hope that Ministers in the Ministry of Defence will recognise the importance of what he said, and complement it. They must be sure that the structures that we built after the second world war and refined in the cold war to protect ourselves and our energy supply are still fit for purpose in the hot politics of the 21st century. As we have heard from colleagues from across the Chamber today, our strategic defence now has two competing and potentially conflicting demands: to deal with our old opponents such as Russia, and to deal with the new formless and stateless enemies such as al-Qaeda. I hope that when they consider the SDSR and energy policy, the Secretary of State and his team will ensure that our approaches to those two issues complement each other and are not in conflict.

Oliver Colvile: Thank you, Mr Deputy Speaker, for calling me in this debate. I congratulate the Chairman of the Defence Committee on getting the debate going successfully.
	This debate feels a little like déjà vu for me, because my maiden speech was about the future of the strategic defence and security review. I fully understand the budgetary constraints that the Ministry of Defence faces. Although I said in my maiden speech that we needed to control public expenditure, I also argued that we needed to ensure that there was enough money in the defence budget to deliver the requirements that we had.
	I remind the House that if that does not happen, we could find ourselves in the same position as the Soviet Union in the 1980s, when it suddenly ran out of money and was unable to deliver the defence capability that it espoused.
	As we heard in the last debate, 50% of our trade is with the EU. I remind hon. Members that the EU is not doing incredibly well at the moment as far as growth is concerned. I therefore think that we need to look to other countries, such as China, Russia and India, where there are potential markets. To do that, we have to ensure that we have decent trade routes and that they remain open.
	As the hon. Member for Plymouth, Sutton and Devonport, I am delighted to be able to speak up for the Royal Navy and 3 Commando Brigade, both of which are based in my constituency. I thank Ministers for committing the Government to ensuring that Plymouth remains a principal naval strategic port. That is very important.
	Keeping our trade routes open is important for the import and export of goods and will be fundamental for growth. As an island nation, we are dependent on sea routes. It is incredibly important to have a strong Navy with good frigates and submarines, and aircraft carriers when they come forward. I pay tribute to the Royal Navy and 3 Commando Brigade in my constituency. They have worked incredibly hard to ensure that we have that security. We must only look at the piracy situation to see how well that is going.
	Plymouth is a global centre for marine science, engineering and research. The Royal Navy is a key part of that. It is important that Plymouth maintains its global reputation for that. As many of my hon. Friends will know, this year we are commemorating the death of Captain Scott in the Antarctic, which took place 100 years ago. I am grateful that there has been a great deal of interest in that subject. We need to ensure that Plymouth remains the home of the Type 23 frigates and that when the decision is eventually is made, we have our fair share of the Type 26s when they become available.
	We have heard suggestions that there may be problems north of the border up in Scotland. It would be helpful if the Minister spent a little time telling us what alternatives we would have should the Scottish Executive and the Scottish people seek independence. He can rest assured that should the Scots be in the process of thinking that they may not want the nuclear deterrent or nuclear submarines, we in Plymouth are ready to pick up the baton and would be happy to open negotiations to try to ensure that we have them.

Andrew Robathan: I do not have the opportunity of winding up today, but I can say that we welcome my hon. Friend’s offer.

Oliver Colvile: I thank the Minister.
	I was somewhat dismayed earlier this week when I heard the news about the Defence Committee’s report and found out how many people had left the military and the civil service. Somewhere along the line, we have to ensure that people who have served in the military and picked up good and worthwhile skills are able to use them in employment elsewhere. When my father,
	who served in the Navy as a professional sailor, having gone to Dartmouth at the age of 14, left as a signalman, he was able to go and get a job as head of outside broadcasting at Rediffusion Television. He was member of the Institution of Electrical Engineers, and he did not have to take exams, or anything like that, in order to prove himself. In those days, it was possible to transfer and use such skills. If our military are to get the best jobs that they possibly can, they will need to use their training and backgrounds. If we are able to deliver on that and to make them feel valued because of the work that they have done, we will be in a much stronger position.
	I am keen to ensure that we in Plymouth are in a position to look after the defence of our country so that when Drake’s drum eventually begins to beat—although I hope it never happens—we can answer the call.

Bernard Jenkin: The strategic defence and security review is having a significant long-term impact on the UK’s defence posture and on our ability to deter aggression and to shape the global strategic environment to reflect UK national interests, and yet we still aspire to a global role. The Government argue that they have established an adaptable posture for UK defences, but the loss of whole capabilities such as carrier strike and maritime reconnaissance, and the paring back of virtually everything else, will leave the UK able to mount only limited operations of limited scale. After Afghanistan, numbers in the British Army will be further cut to 87,000, or perhaps even 84,000. Even the brigade-plus we currently deploy in Helmand—a fighting force of just 1,500 men—will be impossible to sustain other than for short durations. Libya was a success, and that reflected luck and political daring on the part of our political leaders, as well as the extraordinary inventiveness and resilience of our armed forces personnel. However, that does not prove that the SDSR is a success.
	The question is what should be done now. As the United States has just announced a new, leaner defence policy, leaving us in Europe more exposed, the world is not becoming safer. Clearly, without money, we must start thinking. I was grateful to hear my hon. Friend the Member for Penrith and The Border (Rory Stewart) extol the virtues of strategic thinking. To date, the fundamental failures at the Ministry of Defence have been intellectual, not technical, and changing the intellectual dimension does not need to cost a lot or require new institutions. The MOD needs to demonstrate new strategy and new operational concepts. There has been no real attempt yet to change what the MOD does. Trying to do the same as before on half the budget will fail. Less of the same will not work, because we no longer deploy critical mass. Nor can we solve the problem merely by doing things better.
	We need a “Hammond review”, quietly to start to build capacity and to think about how to do things differently at low cost. That approach is alien to MOD culture and the defence industries, and it requires new people and new lead contractors. My right hon. Friend the Secretary of State should create a new, competent, imaginative, trustworthy team with real technical
	expertise—not consultants but dedicated people with collective responsibility, continuity and a real stake in seeing the problems solved. The civil service cannot do that in the traditional way, which underlines the weakness of putting it into a dominant position on the Defence Board, as my hon. Friend the Member for Gainsborough (Mr Leigh) pointed out.
	The Chief of the Defence Staff should build the new team for the Secretary of State, but he would still need to monitor it closely. It needs external sources of ideas and expertise, and it must explore how the MOD can be enabled to adapt and evolve using its own resources so that it can generate and regenerate the forms of power that the UK, and indeed Europe, need in this rapidly changing world. That requires a recreation of the country’s competitive stance, just as the US’s competitive stance ensures its technological and industrial dominance. The Secretary of State should involve others from Whitehall and Parliament, from the City and commerce, and from other like-minded defence ministries and industries. We cannot rely wholly on analysis by US organisations such as RAND.
	There are similar problems in our defence industry. How much industrial research and development capacity has been lost in the past 15 years? Does anybody know? With such a small budget, it no longer makes sense to have prime contractors. The more we use them, the less adaptable and the less able to reduce costs we will be. Reliance on them has proved no substitute for the MOD as an intelligent customer. The UK has always been good at small, and we should exploit that advantage by harnessing the networks of small businesses that are truly innovative and inventive but currently find it impossible to get their ideas into the MOD and the armed forces.
	The new equipment programme must reflect what we need and can afford, which will depend on the capacity to generate what we need when it is needed. The MOD faces huge challenges, and the reconstitution and regeneration of the previously extant force is no longer an option. We have used up our force and cannot replace it. The only viable option is a new concept of responsiveness, and it is time to think bravely and boldly. As my right hon. Friend the Secretary of State put it in his recent speech to the Atlantic Council:
	“Necessity drives innovation—and it breaks down barriers…With budgets so tight, Allies need to revisit approaches and ideas that might previously have seemed politically unacceptable.”
	That must apply at home as well as abroad. I was encouraged by the tone of his speech today, and I hope that the MOD is working towards those goals.

Penny Mordaunt: I start by declaring my interest as a member of the reserve forces.
	Are we sufficiently well defended? For an answer, we might do worse than refer to the Prime Minister’s remarks to the Liaison Committee last year. He said that if the question was whether the UK was
	“a full spectrum defence power, I would answer that literally by saying yes, because I think if you look…across the piece, you take a Navy that has got hunter-killer submarines, that has a nuclear deterrent that we are renewing, that has two of the most modern and up-to-date aircraft carriers coming down the track; if you
	look at our Air Force, that has got the Typhoon, one of the most capable and successful aircraft that anyone has anywhere in the world”.
	At that point my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), the Chairman of the Defence Committee, interrupted:
	“Prime Minister, everyone knows what we’ve got.”
	Indeed we do, and we know what we have not got, too. “Coming down the track” means “not here yet”. I am reassured by the excellent work on the Type 26 of the Under-Secretary of State for Defence, my hon. Friend the Member for Mid Worcestershire (Peter Luff), who is responsible for procurement, and by the fact that the Prime Minister speaks enthusiastically about the carriers, but by his own definition of full spectrum capability Britain currently, although unavoidably and understandably, comes up short.
	We inherited a catastrophic mess at the MOD when we came into government—I am sorry that we do not have many Opposition Members still in the Chamber to hear me say that. Tough decisions had to be made to clean up that mess, leading to the capability gap and the challenging task of regenerating that capability. We must succeed in doing that, but I am increasingly concerned that we risk failure.
	If Britain wants to live up to her billing as a leading nation, we must perform like one. The world still looks to Britain for leadership—as in the recent action in Libya—and it is incumbent on us to be ready to meet those calls in our own national interest. The Royal Navy gives us global reach. It allows us to be present anywhere in the world within 12 miles off any coast with impunity. It keeps food in our supermarkets and the fuel flowing so we can distribute and cook it. Our island nation depends on the Navy for its very survival, an obvious point not often recognised by Departments of State or parliamentarians—present company excepted.
	Recognition of that fact does not require one to hark back to the days when Britain’s carrier fleet numbered 55 ships, but it means we need to increase the size of the current surface fleet with the carrier strike and the Type 26 combat ship. It requires us also to ensure that those platforms are properly supplied, so that they can be at their most flexible.
	We must stop hollowing out capability. I told the MOD permanent secretary at the Defence Committee that some ships were sent to Operation Ellamy and elsewhere with dangerously hollowed-out capacity. HMS Westminster had only 10% of her ordnance, or, to put it another way, only two shots in the barrel. In response, the permanent secretary spoke of “layered defence” and
	“other capabilities that we had in terms of submarines…and …aircraft”.
	She also said that it was
	“absolutely an operational decision on whether it is safe”
	to send Westminster.
	“Layered defence” is all very well, but I wonder whether the Westminster’s 190 crew would not have felt more secure if they had the means to defend themselves rather than relying on others. It might have been an “operational decision”, but would we not put the people making such decisions in a far more comfortable position if they knew that ships had a more appropriate complement of missiles? I anticipate that the MOD would answer that missile numbers are secret, but they are not. Anyone—
	friend or foe—with a moderately priced pair of binoculars and the inclination to look could have discovered how many Harpoon missiles were on Westminster.
	The MOD must develop a mechanism properly to plan, acquire and monitor ordnance stocks. No such mechanism exists. As I have raised that point in the Committee, with Ministers and on the Floor of the House, I would like to see evidence that it is being addressed.
	I would also like greater recognition of our dependence on carrier strike. As the Foreign Secretary mentioned earlier this week with regard to HMS Argyll’s passage through the strait of Hormuz, we currently rely on our allies—in that instance in the form of the USS Abraham Lincoln. It is apparent, therefore, that when we say we do not need carrier strike for the next decade, we mean we need it but hope to use someone else’s.
	That might be all very well when our interests align with those of our allies, but what about when they do not? The Prime Minister has rightly taken a robust line on Argentine pretensions over the sovereignty of the Falklands. The US Administration takes quite a different view, regarding the UK administration of the islands as “de facto” and taking “no position regarding sovereignty”. We are encouraged to work things out with Argentina “through normal diplomatic channels”. If it came to it, one suspects that requests for carrier cover would fall on deaf ears.
	Equally, although one must recognise that while flying sorties from Norfolk for a time was the only way to halt Gaddafi’s murderous advances in Libya, it was expensive. Had the Ark Royal not been decommissioned, it is unthinkable that she would not have been sent on Ellamy. Had we flown sorties from a carrier in the Mediterranean rather than from an airfield in East Anglia, they would have been more frequent and more responsive, and the need to return to base without dropping a bomb would have been less of a waste of time and money.
	I raise those issues not to chastise the Government for the SDSR—they had to close the gap in the defence budget—but to show our dependence on carrier strike force. The Prime Minister has said that carriers are necessary for a nation to have full military capability, which means every day of every week, all year round. Accepting the need for carriers is to accept that we must have both Queen Elizabeth class ships in operation—at minimum, one on, one off.

Edward Leigh: Does my hon. Friend recall that the US Secretary of State, Hillary Clinton, referred recently to the Falkland Islands as “the Malvinas”, therefore implicitly giving a nod in the direction of Argentina? My hon. Friend is right that we could in no shape or form depend on the Americans if there were any threat against the Falklands. Were they taken, without a carrier, we could never take them back.

Penny Mordaunt: If someone had an argument about the sovereignty of an eastern state, I am quite sure we would have a much more robust response from our nearest ally.
	The cost and specification of the new carriers has been much derided. One estimate is that they could be as much as £3.1 billion more expensive than planned.
	I have heard many an “amusing” conversation in this place about the decks being too short for aircraft to take-off and the possibility of sailors being burnt to a crisp by aircraft engines, along with other such Bird and Fortune material. We laugh, while blindly heading for a greater folly: spending such a sum, only to deny ourselves the capability that it should have brought. If we end up with just one operational carrier, we will have wasted £5 billion over the initial estimates, yet for months of every year we will be without cover. If our enemies strike during an off-period, the British people will ask what that hefty final bill has actually achieved. Thanks to the last Government, £3 billion has been needlessly spent on carrier strike force. Under this Government, let us not have £7 billion pointlessly spent.

Tobias Ellwood: I am grateful to catch your eye, Mr Deputy Speaker. Like others, I declare my interest as a member of the Territorial Army. There seem to be enough of us here to form a small platoon, which would perhaps be interesting, although such a platoon would come only from this side of the Chamber. Indeed, there is a noticeable absence of support for today’s debate from the Opposition Benches—[ Interruption ]—other than from the right hon. Member for Rotherham (Mr MacShane), who has just walked into the Chamber.
	I congratulate my hon. Friend the Member for Portsmouth North (Penny Mordaunt), as well as my hon. Friend the Member for Penrith and The Border (Rory Stewart), who, with his eloquent speech, raised the standard of this debate—we were getting into the weeds a little bit, talking about the tactics of the SDSR rather than the strategy. We were starting to talk about the individual bits of kit that we enjoy, like or are in love with—we are always quick to quote a retired general or admiral saying, “This is exactly what we need”—rather than stepping back and asking what the strategy is and where we fit in the bigger picture. Fundamentally, the SDSR is about how we protect our people, our allies, our economy and our infrastructure—indeed, our way of life—from the potential risks that we face. It is about how, on occasions working with our allies, we apply the instruments of power to influence and shape the global environment, and how potential tactical threats affect us.
	The shadow Secretary of State did not want to get partisan when I intervened on him, but it is important to reflect on what happened over the last decade. Not only did the previous Government not have an SDSR, which was bad time management, but not having one affected our military’s ability to perform. During that decade we saw the September 11 attacks, we were involved in enormous campaigns in Afghanistan and Iraq, and we had the July 2005 bombings. The type of threat changed, compared with the cold war stance that we were used to. There were huge changes in operational tactics too, with the introduction of drone warfare, advances in missile systems and stealth technology—ways to introduce force multipliers that did not exist before. The conduct of war also changed, with an emphasis on stabilisation operations as much as war fighting, as illustrated in Iraq and Afghanistan. The kinetic phases
	of those campaigns were over very quickly, but the lack of an unconditional surrender meant that we then got into protracted stabilisation and peacekeeping operations.
	I was saddened to visit Sandhurst not long ago and find that it had only just introduced courses in CIMIC—civil-military co-operation—which are required to enable the military to liaise and work with civilian counterparts, NGOs and the Department for International Development in those other operations, which start in the aftermath of the war fighting. That is what we now need to get good at; that is what was missing in Afghanistan and Iraq. Had the Labour Government held a defence review, those issues would have been identified. However, they did not, and we failed to take the opportunity to fundamentally modernise our armed forces. I think the Chilcot inquiry will reflect that. It will show that our armed forces found themselves in two campaigns with the wrong numbers and the wrong equipment, and without a clear strategy.
	I firmly agree with my hon. Friend the Member for Penrith and The Border about our ability to work more cohesively with other Departments. We need to be able to work with DFID and the Foreign and Commonwealth Office to ensure that our strategy—the purpose of sending our military into danger—is absolutely crystal clear. It is clear from General Petraeus’s book on counter-insurgency that it is not enough simply to defeat the enemy; we now have to win over the hearts and minds of the locals—the friends that we are trying to support.
	The triangle consisting of security at the top, then governance, followed by development and reconstruction has still not been developed. In Afghanistan, the security aspects took far too long to get right. Huge questions still arise as to why we ended up in Helmand province anyway. Those of us who know the history of that country will be aware of the treaty of Gandamak and the battle of Kandahar. Events such as those tell us that we are not particularly welcome in that patch of Afghanistan, given the history there. There might have been other places in which we could have been more strategically helpful. Lessons have been learned from those engagements and put into practice in Libya, where there has been a far more coherent effort, not only within our own Departments but in regard to whom we work with, including our NATO allies.
	Labour missed a massive opportunity to understand what exactly our military are expected to do. Our armed forces were placed in danger and given kit that was out of date. I mentioned Snatch Land Rovers in an intervention. Too often at that time, other bits of kit were thrown at the military for testing, to see whether they would work. They included vehicles such as the Jackal, the Cougar, the Vector and the Ridgeback. Eventually, the Mastiff came along and proved to be the most suitable for use in those operations. Things should not have had to work in that way, however. A security strategy could have helped in that context.
	Procurement errors have been made. The Nimrod has been mentioned many times in the debate. The contract for its development was signed in 1996, and it was due for delivery in 2003, yet not one aircraft ever received a certificate of airworthiness. The Sea Harriers have been cut, which means that there is now no chance of us ever putting a carrier in. The existing Harriers do not have guns; they do not have the Mauser weapon systems.
	They cannot carry the Brimstone or the Storm Shadow, yet those missiles were critical to the success of the action in Libya.
	We get stuck with certain favourite bits of kit. The Apache is now in a new dimension. It travels at two thirds the speed of the Harrier and fires the Hellfire missile, which is just as potent as any of our other weapons. We hear that the Falklands are under threat. We have an aircraft carrier there, so the base already exists, and it has the Typhoon and the Tornado. The Argentines spend only £3 billion on their defence budget, compared with our £30 billion. I believe that we should place the question of Argentina in a separate context in relation to the SDSR. It is a distraction from where we are going.
	Finally, I should like to congratulate the Defence team on what it is doing. I think that we are finally progressing—

Nigel Evans: Order.

Richard Drax: It is a pleasure to follow my hon. Friend the Member for Bournemouth East (Mr Ellwood). I, too, would like to pay tribute to my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) and to the Backbench Business Committee.
	I am speaking on behalf of my constituents, but I am also speaking on behalf of the many who are serving in our armed forces who cannot speak for themselves. As has already been mentioned today, George Washington once said:
	“In time of peace, prepare for war.”
	I feel that that quote is rather pertinent, as we scrutinise the progress of the strategic defence and security review. There is no doubt that a review was needed, but the decisions that flowed from it have left our country exposed and weakened, militarily and politically—the two go hand in hand. How can we possibly advance our peaceful cause, and protect our interests around the world, if we do not have sufficient muscle to flex, and ultimately to use, when things go wrong, as history shows they do. Yes, Labour left us with a £38 billion black hole. Yes, the Ministry of Defence was bloated. Yes, the armed forces are top heavy and need rebalancing, and yes, procurement was out of control. Regrettably, however, the Treasury’s will has prevailed over that of the military.
	There is to be a loss of personnel. The Army is to lose 7,000, and the Royal Air Force and the Navy 5,000 each, with a further 4,000 soldiers to go. That is a tragedy. In regard to our front-line troops being protected from the cuts, we have been told that no one who is in receipt of the operational allowance, preparing for deployment, on post-deployment leave or recovering from injury will face compulsory redundancy. Although that has been followed to the letter, we know that, in some cases, compulsory redundancies have followed the end of post-deployment leave almost immediately. I should also like to comment on the fact that some troops who are currently preparing for deployment know that they are on the list for voluntary redundancy. How odd that must be for them, fighting for their redundancy money. I wonder what that does for morale on the battlefield.
	I would also like to touch on plans to change the ratio of regulars to reserves from 80:20 to about 70:30. The reserves, who include many esteemed colleagues in the House, do a wonderful job, and I pay due respect to them, but I believe, as do others, that the thinking behind the proposal is seriously flawed. When budgets are tight, the integrity of the armed services must be maintained by the regulars. We simply do not have the money to spend on the reserves, as they do in America. Reserves are harder to recruit and retain, and expensive to train. If thousands of troops return from Germany, where will we train our armed services? Even now the reserves in my constituency of South Dorset have a nightmare trying to find places to train because the regulars get there first. Senior officers have told me that they would rather have more regulars for the same amount of money.
	I turn to the ongoing redundancies. With nearly 3 million people out of work, is it wise to throw experienced and highly valued servicemen and women out into the cold and potentially on to the welfare state? It simply cannot be. I genuinely believe that those who have not served in the uniformed branch of our country, and that applies to most people in the House and, dare I say, all the Cabinet—that is not a personal assault on them—simply do not understand its value. Quite apart from the wonderful job all those in uniform do, they are standard bearers for our local communities and contributors in many walks of life, especially when they return to civilian life. Having served, they give back so much.
	Much mention has been made of the gaping hole, up to 2020 or thereabouts, that will exist in our defence strategy. Not until then, we are told, will we have two new aircraft carriers, supposedly, the planes to fly off them—as we have heard, we are not sure which planes they will be, whether they will be able to land or take off, or whether they can deliver the necessary armaments—the new fleet of Astute class submarines and six state-of-the-art Type 45 destroyers. I will believe it all when I see it.
	In the meantime, the storm clouds are gathering—this is not some dramatic statement; they are. The following is not an exhaustive list. There is Iran. There is the Arab spring, as I and many others believe, turning wintry. Even our recent triumph in Libya looks shaky. There is Nigeria and Yemen. There is the Falklands. There is Russia—unpredictable. There is China—empire building. North Korea remains a sinister enigma. In Europe—our allies—the German chancellor warns that “half a century of peace in Europe” could end if the euro collapses. Here at home—let us not forget good old Britain—Irish terrorism still erupts sporadically. On the mainland, we considered deploying troops on our streets to counter riots.
	What do we do? We disarm. But the truth is defence spending must rise, not fall. It was 5% when I served, and it is now about 2.5%, as we have heard, and the NATO minimum is 2%. It is our solemn duty in the House to protect our island, safeguard our dependent territories, and meet our NATO commitments. The money must be found, and it can be. We squander millions on overseas aid—I accept that charity must go abroad, but not to the extent it does. There is our massive contribution to the EU, and when we renegotiate—and we will—we will get back billions, which we can then spend on things that this nation
	needs. There are the many quangos that were going to be burned on the bonfire. Then there is the vast welfare state. The list goes on.
	Defence is a matter of priorities. I accept that, economically, Departments must make cuts, but will our enemies look at this country and refrain from aggressive action because we face austere times and cut our defence capability? History shows that that is when our enemies will strike.

Bob Russell: As the newest member of the Defence Committee, I congratulate the Chairman, my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), on setting the scene for this excellent debate. I also endorse the comments made by my hon. Friend the Member for North Wiltshire (Mr Gray).
	In opposition, both the Conservatives and the Liberal Democrats criticised the Government because our armed forces were under strength and overstretched. I regret to say that the coalition Government are making a bad situation even worse. The morale of Her Majesty’s armed forces is not as good as it should be and among the reasons for that low morale are poor conditions.
	I commend the previous Government, for example, for what they did with the new Merville barracks in the Colchester constituency, but I condemn them for their failure to upgrade the family accommodation sufficiently in 13 years. Even today, one can see it with single soldier’s accommodation. When the Defence Committee went to Catterick, we were shown level 4—perhaps it is called category 4—accommodation, which reminded me very much of what we used to see in “Auf Wiedersehen, Pet” when the work force decided to decorate the place. The Army in Catterick got in paint and paint brushes and allowed the soldiers to determine their colour scheme in the various bits of the barrack block. The colour variations included interesting combinations and the quality of the workmanship was variable. I do not think that that is the right way to treat our brave soldiers, nor is it right that soldiers’ families should continue to live in accommodation that is not what we would expect in civilian life.
	We know that the size of the Army will go down and we have been told today that the numbers will be the lowest since the Crimea. The statistic I had was that they were the lowest since the Boer war, Baden-Powell and Mafeking. Whatever that number is, it is too small for us to have a role on the world stage. We have commitments. The Falkland Islands have been mentioned and I should like to endorse those who have pointed out that it is fortress Falklands now and that things are completely different from 30 years ago. I do not think we should get over-anxious. We obviously need to be alert, but we should not think that the Falklands in 2012 are as they were in 1982.
	I pay tribute, as others have, to the Territorials and reservists. Without them, we could not do what we do. Without the 10% of the British Army that is not British, it could not do what it does. We should pay tribute, in particular, to those people from the Commonwealth nations who serve in Her Majesty’s three armed forces.
	Let us also praise those who provide leadership for the air, sea and army cadets. I am delighted to say that we have all three units in the garrison town of Colchester.
	I want to conclude, as others wish to speak, on the subject of the future of the Ministry of Defence police. There are some 3,600 MDP officers and their headquarters are in Essex, in Wethersfield. Despite their highly trained and specialised nature, the role of Ministry of Defence police is often not well understood by decision makers and the wider general public. Indeed, under the previous Government, I went to the MOD to make a special plea on behalf of the Ministry of Defence police in the garrison town of Colchester and I could not get people to understand the important role they played. As a result, the number of MDPs in my constituency has gone from 30 to three. With the best will in the world, the Essex constabulary cannot plug the gap left by the loss of 27 Ministry of Defence police officers. The MDP is facing major cuts to its budget and numbers as part of the strategic defence and security review, with a potentially disastrous impact on national security. The Ministry of Defence must reconsider and I hope that the Defence Committee will help the Ministry of Defence realise that cutting the MOD police is not the brightest of the ideas that it is considering.

John Glen: As a member of the Defence Committee, I welcome this opportunity to contribute to the debate. Defence reform is a complex matter and it is not easy, in a few minutes, to encapsulate coherently and completely in an incisive contribution how one would move things forward. I say that to mitigate the disappointment when I sit down and to reflect how difficult it is to reform a Department that has so much complexity hard-wired into its fabric. Much analysis and many reports on this issue have been undertaken over the years and I do not want to use my time now to revisit controversial decisions on whether, if or when we will have an aircraft carrier or aircraft carriers, or on the number of senior posts that will be rationalised, or on how those decisions were taken. Neither do I want to examine the different reasons armed forces personnel face a greater likelihood of compulsory redundancy than their civil service counterparts.
	The three points I wish to raise today concern culture, accountability and the measurement of outcomes. Regardless of what decisions are made about programmes and the size and shape of the three services, it is in those three areas that lasting, effective and meaningful reform will be achieved. Many people will probably raise their eyebrows at the mention of culture and think it is a soft and peripheral concern. They might think that the culture of the armed forces is well defined and focused, so let me explain what I mean.
	I have no doubt whatever that the sense of discipline, service and mutual dependency is fully developed within the culture of the armed services, as is that brave willingness to risk life and limb for country. However, I am increasingly of the view, through all my different interactions with the armed services in the two years I have been in the House, that although in operational terms there is no doubt about how well the different services work together, when it comes to taking decisions in the interests of UK defence at the strategic and policy level, individuals display an undue dependency
	on their own service, department or section and the affinities that go with them. Often, I feel that decisions on fundamental matters of reform are made on the basis of the relative political skills of the senior individuals involved. Until a culture exists that rewards and prizes fully at all levels the good of UK defence above other ingrained imperatives, lasting and successful reform will not happen. We cannot continue to pay lip service to jointery from a structural and organisational chart perspective but make no real investment in the mechanics of decision making within the MOD.
	The second issue I want to address is accountability. The Defence Committee’s report of just this week says that
	“the MoD could not provide adequate audit evidence for over £5.2 billion worth of certain inventory and capital spares.”
	My hon. Friend the Member for North Wiltshire (Mr Gray) referred to the Secretary of State appearing like the chairman of an international company.

James Gray: A very good one.

John Glen: Indeed, but what would happen in a business if such inventory could not be accounted for so that for the fifth year the financial director had to qualify the accounts? My gallant Defence Committee colleague, my hon. Friend the Member for Beckenham (Bob Stewart), recently told me he had once been severely reprimanded for an unaccounted rifle. That was only a generation ago, yet today £125 million-worth of Bowman radios are still unaccounted for.
	Many Members will raise their eyebrows, because the issue has been highlighted so many times in different reports, but poor accountability for decisions and outcomes and for the use of public money needs to be addressed. Accountability needs to be hard-wired in the MOD, not just at the highest level but at every level, otherwise reform will not be successful.
	The final issue I want to examine is measuring outcomes. As a member of the Select Committee, I draw attention to our recent report, which notes that we were told that
	“88 per cent progress had been made to a stable and secure Afghanistan.”
	It is a promising statistic, but when we examined it further we were told that
	“the performance was not 88 per cent against a full range of indicators of what is happening in Afghanistan, for example on the quality of governance, the economy and security.”
	In that case, what is the point of such a statistic in the MOD’s annual report and accounts? We can debate at length the different aspects of decision making and allocation of resources, but until we have proper accountability and measurement of outcomes we cannot have real change in future outcomes and conduct in our MOD. We need to change the culture. We need real accountability, with consequences. We need to measure outcomes so that effective decision making can be built on well into the future.

Several hon. Members: rose —

Nigel Evans: Order. I remind Members that the wind-up by James Arbuthnot will start no later than five to 6.

Bob Stewart: I congratulate my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), the Chairman of the Defence Committee, on which I sit. His leadership is outstanding.
	I want to talk about what might be the most important thing: morale. As we all know, Napoleon called morale the sacred flame—the thing that matters more than anything else. He said that morale is to the physical as three is to one. When I was a captain, I used to teach leadership at Sandhurst and I could not quite understand what he meant. Ten years later, when I was a British military commander in Bosnia, people would ask me—Serbs, Croats or Muslims—how many men I had under my command. I would reply, “Lots. How many do you think?” They said, “Between 3,000 and 4,000.” I had 800. Morale made the difference.
	High morale is definitely a force multiplier. It is not quantifiable statistically, but we can feel it. My experience is clear. When we go into a unit, we can feel what morale is like from the way people talk, stand and behave. Let us be clear: the British armed forces have the highest morale in the world on operations. Anyone who has visited our troops in Afghanistan can see that. Wherever British soldiers go in the world, their morale is high on operations. I am worried about what happens when they are not on operations.
	In all the years I have been involved with the Army, and it goes back a long time—1967—I have never seen such low morale among personnel when they are not on operations. There is a difference. On operations they come up to the plate; they are fantastic. They are everything one would always expect. It is the British way of doing it. But off operations—boom! Down they go.
	Obviously, the SDSR has an impact, because there is massive uncertainty on job security and life for the future. There is a pay freeze, and rising inflation has made life very difficult for the junior ranks. Some service personnel are involved in change programmes. They see an increase in work load and fewer resources being given to them. Obviously, barracks and the accommodation are not great. The Welsh Guards in Cavalry barracks are looking forward to having a hot shower when they go to Afghanistan—and they are in west London.
	I hope last night’s Evening Standard is wrong that anyone above the rank of sergeant is going to lose his or her London weighting, because if that is the case a sergeant will get a 4.5% pay cut in London, when he or she has no choice over where they are deployed. Do we take a pay cut? Do we lose our London weighting? Do civil servants lose their London weighting? It is not fair.
	Many people, of course, serve away from home for a long time, and the tour interval for some people is now down to about a year. Families do not like it, clearly, and they put pressure on soldiers. The biggest contributory factor to low morale is the fact that our armed forces are taking such a cut in personnel.
	Leadership is essential. Leadership in the Ministry of Defence is about heart as much as statistics. Soldiers need to know they matter and are cared for by the people who look after them. Military commanders should look downwards first before they look upwards. I am slightly worried because I seem to think—I hope I
	am wrong, but perhaps I am not—that too many generals are trying to be political or be civil servants rather than looking down at their soldiers.
	I will end, because I know we are short of time, by concluding on morale. If we want to be the best—to use the Army’s phrase, “Be the best”—we must get morale right. It is not right at the moment, particularly when our soldiers, sailors and airmen are not serving in the field. Addressing morale is the top priority of everyone in the Ministry of Defence, from the Secretary of State downwards. It is very important that everyone in a position of power and influence puts their heart and soul into getting that vital aspect as good as it can be. Thank you for calling me, Mr Deputy Speaker.

James Arbuthnot: With the leave of the House, Mr Deputy Speaker, I will simply do a brief analysis of what has emerged from a really good and effective debate.
	The right hon. Member for Newcastle upon Tyne East (Mr Brown) talked about nuclear deterrence. Personally, I give his arguments rather more credence than most of his own party do, because he was thoughtful and highly intelligent, as one would expect from him, about the nuclear deterrent; but the hon. Member for Barrow and Furness (John Woodcock) later made some comments about the nuclear deterrent, echoed by my hon. Friend the Member for New Forest East (Dr Lewis), which I think carried the day in the persuasiveness of the arguments. Nevertheless, I thought that the way in which the right hon. Gentleman spoke was very sympathetic and most persuasive.
	My hon. and gallant Friend the Member for Canterbury (Mr Brazier) showed what he brings to the House of Commons Defence Committee. He brings a passion, an understanding and a degree of detailed knowledge of figures that is sometimes quite intimidating, but is enormously valuable. He will hold the feet of the Defence Committee to the fire, and as a result we will do our best to hold the Ministry of Defence’s feet to the fire.
	The hon. Member for Bridgend (Mrs Moon), as always, drew our attention to important matters, such as the maritime patrol aircraft—a key issue—and the various ways in which its absence will cause huge difficulties for this country. We on the Defence Committee know that it was perhaps the most difficult issue for the Government to confront in the strategic defence and security review, but when the hon. Lady told the House that we could be sharing Luxembourg’s maritime patrol capability, that brought home quite what a pass we have come to.
	I want defend my right hon. Friend the Secretary of State, who has been accused of partisanship. I am not entirely sure that he was attacking the Labour party; I think he was mostly attacking the previous Prime Minister, and in that many might join him. In fact, many Labour Members might join him, judging by the many conversations I have had with former Secretaries of State for Defence bemoaning the way Ministry of Defence budgets were treated.
	I hope that at some stage my right hon. Friend will be able to provide me or the Committee with a written answer on why the stabilisation unit, which is not part of the combat forces in Afghanistan, is expected to be withdrawn by the end of 2014. It seems to me that it has a role to play after that.
	Having defended my right hon. Friend, I shall attack the shadow Secretary of State for Defence in a way that I have attacked him before by suggesting that he runs the real risk of becoming leader of the Labour party. I know that that does him no good, but I have always thought it. He was described today as temperate, and rightly so in my view.
	The hon. Member for Edinburgh West (Mike Crockart) made a powerful case on the bases and barracks in and around his constituency, which will go down extremely well in Scotland, I am sure. The hon. Member for York Central (Hugh Bayley) offered a world view of defence and of the strengths and weaknesses of Europe. I entirely agree with his comments, apart from one with which I have a little difficulty. I agree with him that Europe has to step up to the plate a great deal more than it has done recently, but in response to his suggestion that the cuts we make in this country should be contingent on other countries improving their defences, I have to say that he might have to wait a very long time before that happens, although I hope I am wrong about that.
	It was wonderful to listen to my hon. Friend the Member for Gainsborough (Mr Leigh). At last I have found someone who is even more gloomy than I —[ Laughter. ] I will long remember his final quotation and try to use it myself. On the point he made in his speech, Argentina should be in no doubt that we will not let the Falkland Islands go, and if the Falkland Islands were by any chance to be retaken by Argentina, we would take them back.
	My hon. and gallant Friend the Member for North Wiltshire (Mr Gray) demonstrated in his speech why he is the chairman of the all-party group on the armed forces. He made an excellent defence of defence budgets and the armed forces in general. The hon. Member for Dunfermline and West Fife (Thomas Docherty) made a powerful contribution, as he always does, to today’s debate and raised the question of whether we should have one carrier or two. I think it essential that we have two carriers, properly configured.
	I am not at all surprised that I agreed with everything that my hon. and gallant Friend the Member for South West Wiltshire (Dr Murrison) said. I think the whole House values his experience as a reservist. I am not all surprised either that I disagreed with a lot of what my hon. and gallant Friend the Member for Penrith and The Border (Rory Stewart) said, but he said it with such strength, clarity and passion that, as has been noted, he kept the whole House gripped. He also made us think, and what a valuable thing that is for a debate such as this.
	My hon. Friend the Member for Stafford (Jeremy Lefroy) talked about very important issues, echoing many that have been made about maintaining the cohesion of the armed forces—
	Motion lapsed (Standing Order No. 9(3)).

AFC WIMBLEDON

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

Siobhain McDonagh: I am pleased to raise this issue in the House today. AFC Wimbledon has an important place in the hearts of many of my constituents. As we approach another big FA cup weekend we will, I am sure, look back at many of the cup’s greatest moments. Perhaps none are so fondly remembered as one from nearly 24 years ago, when a team that had been in the Football League for only 11 years beat probably the best team in Europe, when the Dons of Wimbledon beat the Reds of Liverpool and John Motson coined his wonderful phrase, “The Crazy Gang have beaten the Culture Club!” My dad and my sister were very lucky to get tickets for the cup final, and a picture of me with my dad, who passed away five years ago, hangs proudly in my hall back in Colliers Wood, with him wearing his yellow and blue rosette. It was a happy day for our community, and it was also one of the happiest days for me, my sister and my dad. Winning the FA cup was a thrilling achievement.
	Nearly a quarter century on, the achievement of one club in going from non-league to FA cup winners in barely a decade has been mirrored by the achievement of another. That club is AFC Wimbledon, which despite being formed only in 2002, has now made its way in less than a decade from jumpers for goalposts to the Football League. Less than 10 years ago a community came together in a time of struggle, and now they have achieved something even more amazing than the original Wimbledon. I am sure that all Members with an interest not just in football but in the power of community will want to join me in saying how proud we are of AFC Wimbledon. Therefore, I take this opportunity to congratulate the manager Terry Brown and his predecessors, and all the current and past players and staff.

Stephen Hammond: I am grateful to the hon. Lady for securing the debate, and for allowing me to intervene. She is absolutely right. The key word she has hit on with AFC is that it is a club of the community of Merton and Wimbledon. The work that it does in the community, beyond its work on the football field, is to be commended. That is why the nickname “The Dons” needs to come back to that club, where it belongs.

Siobhain McDonagh: I completely agree with the hon. Gentleman.
	The people we most want to congratulate are the supporters. AFC Wimbledon is owned by the fans through a small supporters group, the Dons Trust, and is deeply rooted in our community. When it was promoted to the Football League at the City of Manchester stadium last May, after Danny Kedwell’s penalty kick and Seb Brown’s heroic penalty saves, it was not just the club that was celebrating, it was the whole community.
	But I have not called this debate today just to praise my local football club—although that would be reason enough. Yes, I want to use this debate to inspire, and to sing the praises of community football. But the main
	reason why I requested the debate is because, strange as it may sound, everyone involved wants to prevent what happened to us from happening again. No true football lover could possible want what happened to us to happen to anyone else.
	Yes, it is true that the fans of AFC Wimbledon are enjoying their success, and yes, they are the same people who enjoyed success as supporters of Wimbledon, but the highs that we have experienced are nothing compared with the lows, and we do not want another club to suffer those. First, in 1991, the club left its home at Plough Lane. This was an ignominious time, especially for those of us who, like me, were connected to Merton council. We were persuaded by the owner, Sam Hammam, that Plough Lane was unsuitable for top-flight football, which required all-seater stadiums, and that he should be allowed to leave while a new stadium was found.

Tom Greatrex: I congratulate my hon. Friend on securing the debate this evening. The point that she is making is pertinent to many football clubs. Does not that show just why, when the Government are considering the future licensing regime for football, there should be a presumption against clubs being able to move out of grounds, unless it is in the interests of the club and they have somewhere permanent to go?

Siobhain McDonagh: I completely agree with my hon. Friend. AFC Wimbledon is a case in point that justifies such registration.
	AFC began to ground-share with Crystal Palace at Selhurst Park in Croydon. They never returned. Even worse, new owners took over and, in 2001, announced that they wanted to move to Milton Keynes. There was of course opposition from fans—not just fans of Wimbledon, but those of virtually every football team in the country. The move was opposed by the Football Association and even the Football League, which blocked the move twice. Many MPs became involved in the campaign against the move, and I wrote numerous times to the football authorities. With such opposition, few of us believed that the move could happen, but in May 2002 an independent commission gave it the green light.
	The decision was as devastating as it was incomprehensible. It was the end of the road for our Dons. For most fans enough was enough, and they stopped supporting Wimbledon FC, which suffered so much that it went into administration the following year, shortly before finally moving into Milton Keynes in September 2003. Not only had the club failed to return, as Sam Hammam had promised it would, but thanks to the independent commission, what was still left was stolen and taken to another part of the country.
	That was the point at which most people would have walked away, but a remarkable group of people decided not to. According to legend, a group of fans including Erik Samuelson, Ivor Heller and Kris Stewart met in a pub and decided to set up their own team, which would be owned by the fans and rooted in the local community—a club they could be proud of. In June 2002 they held open trials on Wimbledon common and cobbled together a team in just a few weeks. Their first game was a friendly against neighbouring Sutton United, another
	famous FA cup giant-killer. Perhaps unsurprisingly, Sutton won the match 4-0, but the result was less important than the fact that the dream was now real.
	Rather like what happens in Kevin Costner’s “Field of Dreams”, those people built their club thinking, “If we build it, they will come.” In a race against time, they found a ground at Kingsmeadow, just over the Merton border in Kingston, and persuaded the Combined Counties Football League to let them enter their competition. And once they had built it, come they did. Around 3,000 fans went to those early games, more than the old Wimbledon had attracted in the championship. What followed has been astonishing: five promotions in nine years.
	However, that is not the whole story. AFC Wimbledon achieved their success in the right way. On the field, year after year they have won the Fair Play award, and off it they have been a model of good management and community involvement. The club is owned by the Dons Trust, a supporters group pledged to retain at least 75% control of the ownership. In 2003 it made the difficult decision to have a share issue in order to buy Kingsmeadow, the ground they share with Kingstonian, a club that is itself in terrible financial trouble and threatened with new asset-stripping owners.
	AFC have been looking to return to Merton ever since, and the council has been very co-operative and supportive throughout. The leader of the council, Stephen Alambritis, a qualified football referee, is personally very involved in working with the club to identify a new home in the borough if that is at all possible. AFC have a real commitment to community sport and are well known in the area for their commitment to women’s football and youth football. I have only good things to say about the chief executive, Erik Samuelson. He is a fan first and foremost, and infamously agreed to carry out his full-time duties in return for the nominal sum of one guinea a year, because
	“it sounded posher than a pound”.
	He would be the first to say that the club would be nothing without every supporter helping to make it a success and the fans who give up their summers to paint the ground, or spend match days selling programmes or running the car park.
	AFC have always been very supportive of the activities that I get involved with in Mitcham and Morden. In 2009 I held a reception for the club here in the House in recognition of its community work, and I remember those people being greeted warmly by many Members. Indeed, back in 2007 when the club was docked 18 points for not knowing that it had to fill out an international transfer form in order to sign a retired player, Jermaine Darlington, from Hackney, 88 MPs joined me in signing an early-day motion about it. Even the then Prime Minister, Tony Blair, told the House:
	“it sounds like a daft rule, and someone should change it.”—[Official Report, 21 March 2007; Vol. 458, c. 813.]
	AFC have made a big impression, because they have been recognised for their work in our local community. So that brings us up to date.
	AFC are an inspiring story of good people doing good things and getting good results, and this is now our opportunity to ensure that clubs such as Wimbledon
	never have to go through the same thing again. The review of football governance is very much to be welcomed, and the work of the Culture, Media and Sport Committee, in particular, has been incredibly helpful.
	I especially pay tribute to a former Member. Alan Keen was an exceptional chair of the all-party football group and, by all accounts, an excellent football player—even into his 70s. He played a leading role in getting football governance taken seriously.
	Supporters Direct, the independent co-operative that champions fans’ concerns, has also been inspirational. Established in 2000, thanks largely to the efforts of my right hon. Friend the Member for Leigh (Andy Burnham), and the exceptional Phil French, whom I was pleased to see at AFC’s first league game against Bristol Rovers last August, it has been a powerful voice of good sense. I especially thank Kevin Rye, who has been a great help to me today, but the entire organisation is fantastic.
	I do not have time to go through the whole subject of football governance, because it deserves a far bigger debate and there are many more people qualified to speak on it than me. I am concerned about the narrow question of how the review of governance can stop clubs going the way of Wimbledon and ensure that they go the way of AFC. It should not be possible for clubs just to pick up sticks and leave the communities that support them. A proper, grown-up relationship between communities and their clubs is the way forward for all clubs, and I back Supporters Direct’s call for action.
	We now have an opportunity to ensure that football clubs can never again have their identity stolen or be uprooted and moved away from the communities that support them. If Supporters Direct’s model of formal licensing had been in place prior to 2002, Sam Hammam and his successors might not have got away with what they did, so we need new rules on supporter and community engagement that give rights to supporters on behalf of the community. Those rights should include the right to have a “fit and proper supporters’ trust” to engage with its club, with basic rights to information, including financial information, and to hold meetings with club executives.
	We should make it mandatory to secure the agreement of the fit and proper supporters’ trust before any fundamental changes to a club, such as the sale of its ground or a move to a different part of the country, take place. I support also the proposals to reduce clubs’ dependency on “benefactors”. Instead, clubs should have to rely on generating their own revenue, as AFC Wimbledon do, as a protection against overspending by speculators.
	So it is clear in my mind that Supporters Direct is right, and I should like to hear the Minister’s views on how licensing could help the supporters of clubs such as Wimbledon, but I should like also to raise the thorny issue of identity theft. It is not the first time that I have raised it in the House, and Members have usually agreed that identity should be protected.
	When the FA commission agreed to let our club leave south London, its supporters felt that their identity had been stolen. Everything that they identified with suddenly belonged to someone else. Very kindly and sensibly, the new Milton Keynes club decided that, even though they were essentially the same club as Wimbledon FC,
	they no longer merited the honours won by Wimbledon, so they handed over the titles and cups to Merton council. They even changed their name from Wimbledon to MK Dons, but “the Dons” is the nickname of Wimble-don, and now that AFC Wimbledon have reached the football league it is time to reclaim our identity. We are the Dons, and it is time for the authorities to look at the running sore of our identity being stolen.
	The Dons are from Wimbledon, and it is time for the new club in Milton Keynes to come out of the shadows and stake out its own identity. I understand that they are a good team with a good young manager, and, although what they did caused a lot of hurt, it is time to consign it to history. It is time for them to find a different way of representing their heritage, in their name, and then the team that are known throughout football as Franchise FC, which most fans think gained their position through identity theft, would be able to carve out their own identity and allow AFC Wimbledon to retain theirs. That would be good for Milton Keynes, removing much of the stigma associated with that club, and it would be good for the game.
	I hope that the Minister will therefore commit to ensuring that the new licensing model also tackles identity theft, and I urge him to back the “Drop the Dons” campaign, launched earlier this month by my local newspaper, the Wimbledon Guardian, and to support my early-day motion on the subject.
	It has been a real privilege to hold this debate today. I have always said that mine is a strong community, and that we are at our best when we act together. Nothing demonstrates that more than the Dons Trust and its creation of a brand-new football club to replace a much-loved old one.
	In just nine years, the club has come a long way and made a big impression not just on me, but on many Members and on the wider football world. When we lost our football club 10 years ago, we lost some of our pride in our community. Well, we have got it back, but we do not want anything like that to happen to anyone else, and we believe that we now have an opportunity to ensure that it does not. So I say, on behalf of every supporter of every club rooted in every community, “Come on you Dons!”

Hugh Robertson: That is a difficult one to follow, Mr Deputy Speaker.
	I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this debate and on the great interest, knowledge and enthusiasm with which she has promoted her local club. I genuinely thank her for that; one of the great things about my job is that it is not always a terribly party political post. I take great pleasure in the fact that Members from both sides of the House want to come together and praise the great work done by sports clubs in their local communities.
	I associate myself entirely with the remarks that the hon. Lady made about Alan Keen. He was a great friend. I am not a good enough footballer to have played much football with him, but I played a great deal of cricket with him. He was a remarkable cricketer for a man in his 60s and a great sports enthusiast. Many people across the House miss him greatly.
	I congratulate AFC Wimbledon on its promotion to the Football League this season. That was well merited and, as the hon. Lady said, a fantastic example of what can be achieved. It was the culmination of a great many things, many of which she mentioned in her speech. However, as she correctly said, it is, just as importantly, an example of what can be achieved through the power and determination of supporters—I am thinking particularly of the three gentlemen whom she mentioned. It is the supporters of AFC Wimbledon who, through their financial acumen and leadership, have driven this success. That is a great model for what fans can achieve and a great example, dare I say it, of the big society in action. I am delighted that their achievements have been recognised by Downing street.
	In the coalition agreement, the Government made a commitment to work with the football authorities—the Football Association, the Premier League and the Football League—in this country to encourage reform of football governance, including measures that would encourage co-operative ownership of football clubs by supporters. Like the hon. Lady, I pay tribute to the work of the Select Committee on Culture, Media and Sport. The Government have supported its report and recommendation that football supporters should have much more of an active role in the running and decision making of their clubs. In our response to that report, we have suggested a number of ways in which we believe that may be achieved.
	The first is through fans being better informed about a club’s activities—for example, its financial standing, particularly, and the identity of its owners. Secondly, supporters ought to be represented or consulted in the club’s decision making. That will help to prevent such unpopular decisions as a club’s moving miles from its traditional fan base, as was the case with Wimbledon FC. Thirdly, supporter and supporter-run groups ought to have a formal share or ownership in their club.
	Following the Select Committee report, we have given the football authorities—the FA, the Premier League and the Football League—the time to determine the best way of achieving those goals. In their response to the Select Committee process, they have the opportunity to work together collaboratively—they have not always done so in the past—for the long-term benefit of the game.
	We have asked those football authorities to bring forward their proposals in three key areas by the end of February this year. The first is the reform of the FA board—a long-running sore since the Burns review. Secondly, there is the relationship between the board, the various FA committees, the council and the shareholders. Thirdly, and most relevantly to this debate, there is the introduction of a licensing system for all professional clubs, where much more robust rules around financial sustainability, fit and proper persons and directors are laid out. We see that licensing model as the appropriate vehicle for greater supporter representation at football clubs. As I said, the football authorities are due to make public their proposals by the end of February. I hope that the hon. Lady will forgive me if I do not pre-empt that tonight.
	The hon. Lady was right to praise the work of Supporters Direct, which has been pivotal in the whole process. It provides fans with the focus and voice to ensure that
	they can secure influence and ownership of sports clubs and has contributed to the setting up of a network of supporters’ trusts in many sports beyond football.
	I recognise that any change in the corporate governance landscape of football ownership will be something of a cultural change. Given that we are trying to modernise and professionalise the governance of football, there will have to be a similar step change in the skills of supporters’ representatives. That will ensure that the success of AFC Wimbledon is repeated across the country and across the leagues.
	I will finish where I started, by congratulating the hon. Lady on securing this debate. Crucially, I not only congratulate AFC Wimbledon once again on their promotion and their recent award, but thank them for the excellent work that they do in the community, which as the hon. Lady said was recognised here in a reception in 2009. To conclude, I reiterate the coalition Government’s commitment to encouraging greater supporter involvement in football clubs. With the hon. Lady and many Members across the House, we await with interest the response of the football authorities to the Select Committee’s report.
	Question put and agreed to.
	House adjourned.